Options Corner: ADBE

Core Insights - Adobe is facing significant challenges, with its stock down 21% this year and nearly 40% over the last 12 months, leading to heightened scrutiny ahead of its second quarter earnings report [1][2][3] Financial Performance - Analysts expect Adobe's adjusted EPS to be around $5.17 per share, with revenue projected at $5.9 billion [1] - The stock has experienced a long downward trend since the last earnings event on December 11, indicating a bearish sentiment in the market [3][5] Technical Analysis - The stock is currently testing a triple bottom support level around $332, which has been a significant area of support in recent sessions [4][6] - The expected price movement for Adobe's stock is estimated to be within a range of plus or minus 3.6% around the current price [7] Options Market Insights - The options market is pricing in a potential move of approximately 9%, equating to over $32, in either direction following the earnings report [9] - Implied volatility for Adobe is at its highest level in the past 52 weeks, presenting opportunities for strategies that capitalize on this elevated volatility [10] Trading Strategy - A suggested trading strategy involves a short put vertical, selling a 330 strike put and buying a 320 put, which could yield a credit of approximately $250 with a risk of $750 [12][13] - This strategy is based on the assumption that the stock will remain above the 330 support level, with a high probability of success if the stock either rises or stays stable [13][14]