27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
Amazon.com Inc. (NASDAQ:AMZN), one of the largest U.S. companies of any stripe, reports first-quarter earnings on April 25. The e-commerce giant is expected to post first-quarter earnings of $4.66 per share on sales of $59.73 billion.
What Happened
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While Amazon is often viewed as a technology stock, its official sector designation is as a consumer discretionary name and the company accounts for a whopping percentage of that sector. Shares of Amazon garner a weight of 24 percent in the Consumer Discretionary Select Sector Index (IXYTR), more than double the weight assigned to the benchmark's second-largest component.
That means Amazon earnings could be impactful for the Direxion Daily Consumer Discretionary Bull 3X Shares (NYSE:WANT) and the Direxion Daily Consumer Discretionary Bear 3X Shares (NYSE:PASS).
Why It's Important
The bullish WANT aims to deliver triple the daily returns of the Consumer Discretionary Select Sector Index while the bearish PASS seeks triple the daily inverse returns of that benchmark. With Amazon's penchant for sizable post-earnings moves, either PASS or WANT could useful for short-term traders in the coming days.
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Shares of Amazon are up 26.62 percent year-to-date and every one of the 45 analysts covering the stock is bullish, suggesting that WANT could be the way to play Amazon earnings or that the trade is crowded and PASS could be poised for short-term gains.
Some data points indicate traders are leaning toward the bullish WANT. For the five days ending Tuesday, April 23rd, volume in WANT was almost 46 percent above the trailing 20-day average, according to Direxion data.
What's Next
Obviously, Amazon is the name that moves the consumer discretionary sector, but there are more potential near-term catalysts for WANT and PASS. During the week of April 29, more than 13 percent of the Consumer Discretionary Select Sector Index reports earnings.
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27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.