INTU Earnings Iron Condor, After the Bell on Tuesday 8/24

INTU, the makers of Mint, TurboTax and QuickBooks report earnings on Tuesday 8/24 after the bell. The Implied Volatility Rank is pretty high at 31% which makes this neutral premium selling strategy attractive. Here’s the trade:

  • Buy the Sept 17 520 Put
  • Sell the Sept 17 525 Put
  • Sell the Sept 17 585 Call
  • Buy the Sept 17 590 Call

Try to collect $166 on entry, which is 1/3 the width of the strikes, 5$ wide, 590-585 the distance between the 2 puts and 2 calls). This defined risk strategy has a max loss of $334, and a 75% probability of making 50% of the credit received, or $83 per contract.

While Jerry is using a neutral strategy, Bob believes this may be a shorting opportunity if earnings disappoint, due to the bearish rising wedge formation. The above trade can be converted to a bearish trade simply by just selling to open the call side, and not adding the lower put side.

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