Earnings Beat – WHR Trade

Market Context
Good day Insiders,

Whirlpool Corp is reporting earnings post the close today and though I was not going to trade this one, I managed to build a trade that carried a risk to reward that just could not be ignored. At the time of this update WHR is trading at 139 and the implied volatility levels are at 73%, this gives us an expected move of +/-$9 taking the stock potentially down to 130 and up to 148. Let’s construct the trade using these parameters.
The Trade
We will use our 3 pieces on the trade, the buying of the butterfly, the selling of the put spread and of course the buying of a call spread.

Risk & Reward
All in, we are risking $3,500 and so long as we get movement in Whirlpool we are golden. Our breakevens are at 147 on the upside and 132.50 on the downside. In the event the stock does not move, we are risking $500, but do not forget that we still have 4 full trading days to work with. Let’s see what happens.