Options Insight: How to Play Amazon Ahead of Earnings

The video discusses Amazon's upcoming earnings report and its impact on stock trading. It explains the concept of implied volatility and how it affects options trading, using tools like the Bloomberg Terminal to analyze options skew. The discussion includes examining the volatility surface to assess risk and market sentiment. A strategic call spread is proposed, reflecting optimism about Amazon's stock performance.

What is the significance of implied volatility in the context of earnings reports?

• It represents the risk associated with the earnings event.

• It predicts the exact stock price after earnings.

• It is irrelevant to stock performance.

• It guarantees a profit from options trading.

What does a straddle in options trading help determine?

• The historical stock performance.

• The implied earnings move.

• The dividend payout.

• The exact future stock price.

What does a downward shift in the options skew curve indicate?

• Higher dividend payouts.

• Guaranteed stock price increase.

• Decreased implied volatility and risk.

• Increased risk for downside protection.

What is the potential payout ratio for the discussed call spread strategy?

• 3:1

• 2.4:1

• 4:1

• 1:1

What is the projected stock price for Amazon if it moves 9% as expected?

• $910

• $850

• $800

• $950