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Hey everyone — JD here with your Rational Trader Market Analysis Daily.
We’re back in earnings season mode, and today I’ve got two trades with very different profiles — but the same outcome in mind: collecting cash by morning.
Let’s jump in.
UnitedHealthcare: Looking for a Modest Pop
First up is UnitedHealthcare (UNH). This trade uses the same 4-leg setup we used on Tesla and others — a double debit spread designed to pay off if the stock moves more than a few percent in either direction after earnings.
Here’s what I’m doing:
- Buy the $280 call and $280 put
- Sell the $290 call and the $270 put
This creates a structure that costs around $9.10, with a maximum payout of $10 — meaning about $0.90 of profit potential per contract.
As long as UNH moves more than 3.5% up or down, this one should deliver. The setup is statistically sound, and volatility is just high enough to make the pricing attractive.
Spotify: Betting It Doesn’t Explode
The second setup is on Spotify, and it’s the opposite approach: a credit spread that assumes the stock won’t go flying higher after earnings.
Spotify options are extremely expensive right now — and when premiums get this rich, I like to sell into it.
Here’s the trade:
- Sell the $830 call
- Buy the $860 call
That gives you a $30-wide spread, capped, and brings in about $0.52 in net credit per contract.
This trade only runs into trouble if Spotify rallies more than 19%, which is extremely rare even during earnings season.
If Spotify stays even remotely sane, you keep the premium. The $860 long call caps your upside risk just in case it gets wild.
Two Extremes, Same Strategy
So here’s what we’ve got:
- UNH: Needs a move
- Spotify: Needs to not move too much
Two opposite structures. Same logic.
Both are built around earnings timing, mean reversion tendencies, and the idea that options pricing often overshoots reality — especially in the hours before big reports.
I’ll be back tomorrow with more update.
But for now, if you like these cash machine setups, drop me a 👍 or 🔥 in my FREE Telegram channel..
Talk soon,
JD
The Rational Trader
