Citi $42.10
-Report Earnings July 15 at 8am.
-implied move in Options market about 4% vs 8 qtr avg of ~3%
-I think there is a good chance if the market retraces some of the last 2 weeks rally that C (which is up 15% off of the June lows) should be weak into the earnings announcement as investors take a more cautious stance into what is likely to be a sloppy report and outlook.
– I want to make a low premium tactical trade into the event while also defining my risk.
TRADE: Buy July 41/40 Put Spread for .21
-Buy July 41 Put for .40
-Sell July 40 Put at .19
Break-even on July Expiration:
Btwn 41 and 40.79 lose up to .21
Above 41 lose all .21
Btwn 40.79 and 40 make up to .79
Below 40 make full .79.
Check back later for some more commentary on Citi.