Amazon Pre-Earnings Trade Strategy Offers A Quick Return Or Discounted Stock Ownership

The implied volatility of the Oct. 31 options chain is sitting around 57%, while Amazon typically trades with an implied volatility of around 34%. With that in mind, investors can consider selling a cash-secured put to take advantage of the high implied volatility surrounding the earnings announcement. A cash-secured put involves selling an at-the-money or out-of-the-money put option and simultaneously setting aside enough cash to buy the stock. The goal is to either have the put expire worthless and keep ...