Earnings Play: BOT 1 ET NOV 06 '20 5 Straddle 0.52USD

On October 29, 2020, we bought straddle options on ET stock expiring on November 6. 

ET is due to announce earnings report on November 4 pre-market, and we decided to try to monetize on it

here is our trade setup:

  • BOT 1  ET NOV 06 '20 5 Call Option  0.25 USD 
  • BOT 1  ET NOV 06 '20 5 Put Option   0.27 USD

For these trades, we paid 52 USD (before commissions)

These trades come as the #40 and #41 in the month of October, as these are debit trades, instead of getting paid, we paid money to have them

here is what should happen next to make us some profit. 

If ET stock is trading above $5.5 after earnings announcement we are making a profit, also if the stock is dropping below $4.5 will make us some profit

As our strike is constructed around $5, the stock should move about 5%