Options Expert On Playing Priceline Ahead Of Earnings

Nic Chahine was recently a guest on #PreMarket Prep, a daily trading idea radio show where you can increase your returns with veteran traders Joel Elconin and Dennis Dick. Follow Nic Chahine on Twitter: @racernic.

Chahine discussed Priceline Group Inc PCLN ahead of its earnings report on Thursday.

The options expert noted that the stock has been prone to large swings, especially following an earnings report, and said that “it’s a lot of money to gamble on a coin flip.”

Chahine preferred to be able to trade options on the stock with an “educated guess,” but felt that on Priceline there “is no educated guess.”

According to Chahine, if “you think to can gauge the move,” then a combination of a debit spread and a farther out-of-the-money credit spread might be one way to play the stock. “Then you want the price to rise or fall through the debit spread but not reach the credit spread.”

Ultimately, Chahine felt that a “small bet” with limited risk would be better on Priceline and he preferred an at-the-money spread where all one has to do is take a position on the direction, rather than having “to guess how far out” to buy options.

Listen to the show below: