Earnings Beat – GOOGL Trade

Market Context
Good day Insiders,

Google is reporting earnings post the close today and our goal is to use the implied volatility to our advantage. Google’s volatility is at 48% which takes the expected move of the stock to +/-$50. At the time of this update GOOGL is trading at 1141, so the downside sits at 1091 while the upside is at 1191. Let’s build our trade in these parameters. We will use our 3 pieces of the trade, the unbalanced condor, the short put spread, and the long call spread.

The Trade
We will be selling the put spread, buying the condor, and buying the call spread.

Risk & Reward
Our risk graph below illustrates that we have downside risk at 1060 mark and our upside profit kicks in at 1177.