Here’s What Happened With the Amazon “Loophole Trades”

Having a good, actionable plan on a trade idea actually come to fruition is a good thing. Acting in a timely fashion when that good fortune presents itself is even better.

Last week, we explored whether or not Amazon.com Inc.‘s (NASDAQ:AMZN) upcoming earnings announcement was a good opportunity to pursue our favorite non-directional trading strategy, the Straddle.

Ultimately, we decided – thanks to my Money Calendar data and my earnings analysis tool – that a Straddle was not the most profitable way to play the news event.

While volatility surrounding AMZN shares suggested that traders were worried about the company hitting estimates, history showed that AMZN was poised to make a bullish move after earnings. So Money Calendar gave us three different bullish “loophole trades” with varying levels of risk to choose from.

So today, let’s take a look at how each of those trades did following AMZN’s highly anticipated earnings announcement…

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How to Play Today’s AMZN Earnings Announcement

In light of Wal-Mart Stores Inc.‘s (NYSE:WMT) bombshell announcement that it’s expecting a 6% to 12% earnings cut over the next two years, expectations are high for Amazon.com Inc. (NASDAQ:AMZN), which reports earnings after the bell today.

The volatility I’m seeing with AMZN shares tells me traders are afraid Amazon might not deliver on earnings.

It’s always difficult to predict which direction a stock will break around earnings. The slightest bit of news could send a stock soaring… or crashing.

Last week, I showed you how to construct a Straddle, a non-directional trade that’s perfect for when you can’t tell which way a stock is going to move.

Ahead of earnings – and all the uncertainty and volatility that comes with it – is AMZN a ripe for a straddle?

Let’s take a look…

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