LinkedIn Corporation (LNKD) is a professional networking site with 300 million members I countries around the world. The stock is currently trading around $252.85 in a 52 week range of $136.02-$276.18. The stock has been doing relatively well this year with shares rallying over 10% year to date. LNKD is set to report their most recent quarterly earnings today after the bell and it appears that the stock may be setting up well for a long into the report.
LNKD has rallied on earnings day 4 of the past 8 quarters and has rallied more than 10% on earnings day for the past 3 quarters. On average the stock moves around 10.3% on earnings. This time around market makers are implying a move of around $21.00 by tomorrow close which would give us an implied upside target of $273.85. LNKD is technically trading inside the cloud showing neutral price action. Despite the relatively sideways chart the stock has shown strong historical performance on earnings. Using the upside measured move target I want to set up a trade in LNKD.
Potential Trade: Buying the LNKD May 1st Weekly 262.5-272.5-282.5 Call Butterfly for $1.00
Risk: $100 per 1 lot
Reward: $900 per 1 lot
Breakeven: $263.50 and $281.50
This trade sets up with a 9-1 reward to risk ration and profits in a very wide range.