Snap Inc (NYSE: SNAP) is scheduled to report earnings on Tuesday and CNBC “Options Action’s” Tony Zhang believes the numbers are going to be fairly strong. Over the last four quarters, the stock moved on earnings around 15.8% on average and the options market is implying a move of 12.9%.
Because of the high implied volatility, Zhang wants to buy the November $28/$32 call spread for a total cost of $1.25. The trade breaks even at $29.25 or about 5.1% above the closing price on Friday. If the stock jumps to $32 at the November expiration, the trade is going to reach its maximal profit of $2.75.
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