ABNB has earnings between 11 to 14 Feb 2025 due to which IV is high.
But I feel the chart is showing weakness with cross below 50 SMA with volume in the last few days and trending downwards.
So, sold a Feb monthly expiry Bear Call Spread.
| SELL | -10 | TO OPEN | ABNB | 21-Feb-25 | 140 | CALL | 2.91 | 1.08 | 25TRD-001 |
| BUY | 10 | TO OPEN | ABNB | 21-Feb-25 | 145 | CALL | 1.83 | CREDIT |
The spread will expire in 25 days and cover the earnings date, so there could be a price spike, but we do not think it will touch $140 which is the strike of the sold call.
We are looking at a potential full credit of $1080 on $3920 investment, resulting in around 27% approx returns if price does not breach upper threshold of $140.
