In this tricky, consolidating market, buying any stock outright is dangerous. So how to mitigate risk and play the potential upside nonetheless?
For traders who own this name already --> Sell the shares and buy ATM calls on the next expiry. This allows to remove the risk while keeping the exposure. For traders who do not own the shares --> buy ATM calls on the next expiry.
1. GOOD , STOCK FLIES --> Convert into shares or sell the calls at a profit
2. POOR , STOCK TANKS --> Lose the premium on the calls and sell an ATM put to make it up
3. STOCK DOES NOTHING --> This is the worst-case scenario, you lose the call premium and move on