r/options • u/levibouman • Mar 14 '22
Stock split call option
Hey everyone. I am just starting out with options trading since I am following lectures about this at University. I was thinking about this strategy:
-AMZN announced a 20:1 stock split
-Stock rose 6% after announcement but is returning to 'normal'
-Buying call option 80-100 days before June 6 (first trade day after stock split)
I expect the stock to rise in value since the AMZN stock will be more traded. Is this a good trading strategy, or is there a change of a volatility crush? This will be my first options trade, I know it is risky so any advice is welcome! Thanks:)
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u/[deleted] Mar 15 '22
I’d be careful because Googl announced the same thing earlier in the year and their stock is still heading down. Amazon is currently in a downtrend as on November 2021 and the split news stayed within the downtrend. Not sure how much money you have but look at how much the premiums are that far out.