Log in Open account
Switzerland
Leveraged products (e.g., CFDs, Forex (FX) including crypto/fiat, options) are complex instruments and come with a high risk of losing money rapidly due to leverage. 61% of retail investor accounts lose money when trading CFDs with this provider. 0.90% of retail clients trading in leveraged products experience a negative account balance after a stop-out occurred. 
Show more
Leveraged products (e.g., CFDs, Forex (FX) including crypto/fiat, options) are complex instruments and come with a high risk of losing money rapidly due to leverage. 61% of retail investor accounts lose money when trading CFDs with this provider. 0.90% of retail clients trading in leveraged products experience a negative account balance after a stop-out occurred. You should consider whether you understand how CFDs, FX, or any of our other products work and whether you can afford to take the high risk of losing your money.
Show less
What are your options - strategies for ASML Holding earnings

What are your options - strategies for ASML Holding earnings

Equities
Koen Hoorelbeke

Investment and Options Strategist

Summary:  In the world of investing, earnings season always brings a flurry of activity and potential opportunities. This coming Wednesday, before the bell, we'll be hearing from ASML Holding N.V., a key player in the semiconductor industry.

What are your options - Strategies for ASML Holding N.V. Earnings


In the world of investing, earnings season always brings a flurry of activity and potential opportunities. This coming Wednesday, before the bell, we'll be hearing from ASML Holding N.V., a key player in the semiconductor industry. With the expected move by this Friday being $35.91, based on an ATM Straddle, there are several interesting trade setups that we can consider. In this article, we'll be exploring three different strategies - one bullish, one neutral, and one bearish - each tailored to different market expectations. These strategies include a Bullish Debit Call Spread, an Iron Condor, and a Bearish Put Debit Spread. Let's dive into the details of these setups and see how they could potentially play out.

Please be aware that our examples below are based on the U.S. version of ASML shares, and they can be adapted to its Dutch counterpart traded on the Amsterdam Euronext Exchange.  

Important note: the strategies and examples provided in this article are purely for educational purposes. They are intended to assist in shaping your thought process and should not be replicated or implemented without careful consideration. Every investor or trader must conduct their own due diligence and take into account their unique financial situation, risk tolerance, and investment objectives before making any decisions. Remember, investing in the stock market carries risk, and it's crucial to make informed decisions.

1. Bullish Strategy: Bullish Debit Call Spread

This strategy involves buying a call option at a certain strike price and selling another call option at a higher strike price. Both options have the same expiration date. This strategy is used when the trader expects the underlying stock to rise moderately within a certain range.
1. Strategy: A Bullish Debit Call Spread is a bullish strategy that involves buying a call option and selling another call option with a higher strike price on the same underlying asset and with the same expiration date. This strategy is used when the trader expects a moderate rise in the price of the underlying asset.

2. Trade Setup: In this case, the trader is buying to open a call option on ASML_US with a strike price of $755 and selling to open a call option with a strike price of $760. Both options expire on August 11, 2023.

3. Premium and Risk: The trader is paying a net premium of $2.30 per share (the difference between the mid prices of the two options), for a total cost of $230  (since each contract represents 100 shares). This is also the maximum risk of the trade. The maximum profit is $270, which is the difference between the strike prices ($5) minus the net premium paid ($2.30), multiplied by 100.

4. Breakeven Point: The breakeven point at expiration is $757.30, which is the lower strike price plus the net premium paid.

5. Probability of Profit (POP): The estimated POP is 57.09%. This is a rough estimate of the chance that the trade will be profitable at expiration. Please note that this is a simplification and actual probability may vary based on factors like changes in implied volatility or the price of the underlying asset. The POP is based on the delta.

6. Implied Volatility (IV) Rank: The IV Rank is 13.82, which is relatively low. This means that options on ASML Holding N.V. are currently cheaper compared to their historical prices.

7. Days to Expiration (DTE): There are 25 days left until the options expire.

2. Neutral Strategy: Iron Condor

An iron condor involves selling a call spread and a put spread on the same underlying asset with the same expiration date. This strategy is used when the trader expects the underlying stock to trade within a certain range until expiration.
If you think that ASML Holding N.V. will stay in the expected move range right after the earnings, consider an iron condor. This strategy involves selling a call spread and a put spread on the same stock with the same expiration date. The goal is for the stock to stay between the strike prices of the sold options.

Here's a possible setup:

- Buy to Open ASML 21-Jul-23 805 Call
- Sell to Open ASML 21-Jul-23 800 Call
- Sell to Open ASML 21-Jul-23 720 Put
- Buy to Open ASML 21-Jul-23 715 Put

Reason

High Implied Volatility (IV) due to numbers out on 19th July before market open

Expectation

Limited movement in ASML shares after releasing the figures and imploding IV

BEPs on expiry

Profit between $718.25 and $801.75

Max Risk

If you get a premium of $1.75 the max risk/loss would be $5 - $1.75 = $3.25 per share. 1 contract = 100 shares. Max Risk/Loss = $3.25 * 100 = $25.

For Who?

Only for clients to adhere to the view that the numbers will not cause a move outside the expected move in the share price of ASML Holding N.V.

Trade set up

Sell the Iron Condor in the last 1 – 4 hours of trading on Tuesday 18th for around $ 1,45 - $1,50 (stagger in case of bigger positions). The more you can receive the more you limit your risk.

Closing

A GTC (Good Till Cancelled) order to close the position at $0,30 (stagger in case of bigger positions)

Emergency

If there is a big move in the underlying outside the bandwidth of the long strikes, monitor closely and close position latest on the 21th of July 2- 4 hours before expiry

Probability of Profit

72.62%
(on expiration, based on delta's of the short positions)

Expected Move

for 21th July ’23, based on ATM straddle: +/- $35.28

IV Rank

13.82

3. Bearish Strategy: Bearish Put Debit Spread
This strategy involves buying a put option at a certain strike price and selling another put option at a lower strike price. Both options have the same expiration date. This strategy is used when the trader expects the underlying stock to fall moderately within a certain range.
- Sell to Open ASML 11-Aug-23 750 Put
- Buy to Open ASML 11-Aug-23 755 Put

This is a Bearish Debit Put Spread on ASML Holding N.V. with an expiration date of August 11, 2023. Here's a breakdown of the trade:

1. Strategy: A Bearish Debit Put Spread is a bearish strategy that involves buying a put option and selling another put option with a lower strike price on the same underlying asset and with the same expiration date. This strategy is used when the trader expects a moderate decline in the price of the underlying asset.

2. Trade Setup: In this case, the trader is buying to open a put option on ASML_US with a strike price of $755 and selling to open a put option with a strike price of $750. Both options expire on August 11, 2023.

3. Premium and Risk: The trader is paying a net premium of $2.35 per share (the difference between the mid prices of the two options), for a total cost of $235 (since each contract represents 100 shares). This is also the maximum risk of the trade. The maximum profit is $265, which is the difference between the strike prices ($5) minus the net premium paid ($2.35), multiplied by 100.

4. Breakeven Point: The breakeven point at expiration is $752.65, which is the higher strike price minus the net premium paid.

5. Probability of Profit (POP): The estimated POP is 51.31%. This is a rough estimate of the chance that the trade will be profitable at expiration, based on the position's delta.

6. Implied Volatility (IV) Rank: The IV Rank is 13.82, which is relatively low. This means that options on JPM are currently cheaper compared to their historical prices.

7. Days to Expiration (DTE): There are 24 days left until the options expire.


Options Overview by barchart.com
Options are complex, high-risk products and require knowledge, investment experience and, in many applications, high risk acceptance. We recommend that before you invest in options, you inform yourself well about the operation and risks. In Saxo Bank's Terms of Use you will find more information on this in the Important Information Options, Futures, Margin and Deficit Procedure. You can also consult the Essential Information Document of the option you want to invest in on Saxo Bank's website.

Quarterly Outlook

01 /

  • Macro Outlook: The US rate cut cycle has begun

    Quarterly Outlook

    Macro Outlook: The US rate cut cycle has begun

    Peter Garnry

    Chief Investment Strategist

    The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c...
    Read full article
  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

    Read full article
  • Equity Outlook: Will lower rates lift all boats in equities?

    Quarterly Outlook

    Equity Outlook: Will lower rates lift all boats in equities?

    Peter Garnry

    Chief Investment Strategist

    After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto...
    Read full article
  • FX Outlook: USD in limbo amid political and policy jitters

    Quarterly Outlook

    FX Outlook: USD in limbo amid political and policy jitters

    Charu Chanana

    Chief Investment Strategist

    As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ...
    Read full article
  • Commodity Outlook: Gold and silver continue to shine bright

    Quarterly Outlook

    Commodity Outlook: Gold and silver continue to shine bright

    Ole Hansen

    Head of Commodity Strategy

    Read full article
  • FX: Risk-on currencies to surge against havens

    Quarterly Outlook

    FX: Risk-on currencies to surge against havens

    Charu Chanana

    Chief Investment Strategist

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo...
    Read full article
  • Equities: Are we blowing bubbles again

    Quarterly Outlook

    Equities: Are we blowing bubbles again

    Peter Garnry

    Chief Investment Strategist

    Explore key trends and opportunities in European equities and electrification theme as market dynami...
    Read full article
  • Macro: Sandcastle economics

    Quarterly Outlook

    Macro: Sandcastle economics

    Peter Garnry

    Chief Investment Strategist

    Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p...
    Read full article
  • Bonds: What to do until inflation stabilises

    Quarterly Outlook

    Bonds: What to do until inflation stabilises

    Althea Spinozzi

    Head of Fixed Income Strategy

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ...
    Read full article
  • Commodities: Energy and grains in focus as metals pause

    Quarterly Outlook

    Commodities: Energy and grains in focus as metals pause

    Ole Hansen

    Head of Commodity Strategy

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...
    Read full article

Disclaimer

 The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)

Saxo Bank (Schweiz) AG
The Circle 38
CH-8058
Zürich-Flughafen
Switzerland

Contact Saxo

Select region

Switzerland
Switzerland
Products & pricing
Platforms
Accounts & service
General
Other
Legal

Losses can exceed deposits on margin products. Please ensure you consult our Risk Warning before you start trading and you understand the risks.

All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a general Risk Warning series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) Ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law. 

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.