Zoom

Background

Monday, 6/1/2020, Zoom spiked ~10% on the speculation that their earnings report (Tue EOD) would greatly exceed expectations. @eric brought this up, and we agreed that it was most likely overvalued.

Since IV is insane at the moment (100%+), playing pure calls/puts are too risky. Put debit spreads and call credit spreads are good options to capture IV crush. I also thought about calendar spreads, but it would be a short calendar which I don’t have the capital for.
Entered Trades:
- Call credit spread 220/225 at 1.7 per share. This was not filled.
- Put debit spread 200/197.5 at 1.2 per share. This was filled right before market close (12:56 PST).
Update:
- Took small loss (.2). Proceeded to sell the same spread after earnings, and broke even after a day, as the stock started tanking.