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Using a Triple Calendar Spread to Trade Google Earnings

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Here, a review of some of the data that an options trader should consider prior to constructing an option trade in order to profit from this earnings event.

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The trade I would like to consider is that of a triple calendar spread. We will buy the December series options, and sell the October series with dramatically increased implied volatility as a result of the impending earnings release.

The Google October monthly option chain is displayed below:


Click to enlarge

The strikes highlighted above would be sold-to-open in this spread while the strikes shown below would be bought-to-open simultaneously to produce the calendar spread discussed above.

The Google December monthly option chain is displayed below:


Click to enlarge
No positions in stocks mentioned.
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