Buy AMZN (sell vertical put spread)

Buy AMZN via selling a vertical put spread

buy Feb 210 puts, sell Feb 220 puts @270.3

Amazon.com earnings will be out after the close. 

My thinking is that there have been a raft of big moves in other stocks, so these options are priced higher. Chart support at 260, 240 and 220. As I type this up, AMZN is slipping lower, so not the best entry. There is about an 8% chance that the 220 puts come into play by expiration. I tend to think volatility is pumped up because of earlier big movers on their earnings (GOOG, NFLX, AAPL and others).

Doing a vertical instead of a straight put sale helps with the margin requirement. Also protects against a crash scenario. On higher priced stocks selling puts before a crash can do permanent damage to an account.

Long EBAY GPS IWM LEN LGF MON PG TBT

Net long AMZN APC BA