Description

Costco (COST) has earnings coming up next week. We're going to do a backspread with puts, or a ratio volatility spread. You can find more in The Options Playbook, which is always available on OptionsPlaybook.com, in on the Amazon Kindle edition.

Specifically:

• A review of last week
• COST will announce earnings on 10/4
• What does the chart say?
• Let's do a backspread with puts
• What's the expected move?
• What's our take?
• Selecting the expiration and strikes
• What if we're wrong?
• What if we're right?
• What is the maxium risk? Reward?
• What happens the farther you go out in time?
• Does it work for every underlying?

Do you have a question that you want answered on a future episode? Send them to Brian at theoptionsguy@invest.ally.com, or to the Options Insider at questions@theoptionsinsider.com.