Trade Alert: Earnings, 5/31/2023

Trying to bet against a company releasing earnings after the close.

Betting Against An AI Name

C3.ai, Inc. (AI 0.00%↑) is up more than 250% year-to-date and more than 100% in the last month. It releases earnings after the close today. I placed a limit order to open a spread on it expiring on June 30th buying the $35 strike puts and selling the $33 strike puts for a net debit of $0.95. The max gain on 3 contracts is $315, the max loss is $285, and the break even is with AI at $34.05. That order hasn’t filled yet, but I’m posting this now so you have to time to place it as well if you want to. The current midpoint on the spread for this one is $1.05, but I’m not going above $0.95 on this one.

Exiting This Trade

Assuming this trade fills, I’ll place a limit order to exit it at 90% of the spread (in this case, $1.80). If that order doesn’t fill as we get close to expiration, I’ll lower the limit price as necessary.

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