Earnings Beat – PYPL Trade
Good day Insiders,
Paypal (PYPL )is set to report earnings today post the close and though we have already placed 2 trade in Facebook and Telsa, Paypal’s options chain gave the opportunity to build a very attractive risk to reward trade to execute on. At the time of this update, PYPL is trading at 107.50 and the implied volatility is sitting at 63% which gives us expected move of +/-$4.75. This could take us down to 103 and up toward 112. We will buy a put butterfly, buy a call spread and sell put spread.
Using the 3 pieces of our trade, we have the put butterfly, the call spread and the selling of a put spread.
Risk & Reward
Our trade will use $3,500 in margin and our breakevens are at 112 and 104. If PYPL does not move post earnings we do have $500 of risk on the table. In addition, our downside protection takes us all the way down to 99.30