Airbnb Stock Just Went on Sale. Here's How to (Safely) Trade the Post-Earnings Dive with Options.
This is the latest example of what today's stock market does during earnings season. It is unlike anything I've seen in my decades of investing. I'm a chartist, strategist, and above all, a risk manager, so the circus that is quarterly reporting from public companies is something I monitor, but go nowhere near.
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If I'm trading a stock with earnings approaching, I'm either hedged or I've reduced my position. The best analogy I can use is that once I've been hit on the head dozens of times, I finally realize that creating distance between myself and whatever is hitting me is a good idea.
As for ABNB, it has risen through the ranks to knock on the door of a $100 billion market capitalization. But the market had other ideas, sending shares down more than 8% on Aug. 7.
Now, near 30x forward earnings and selling at well under 3x its earnings growth rate, this stock might be worth a look.
Because after the market punishes a stock for missing earnings or issuing a lackluster forecast, it moves on to something else. And when that happens, there could be opportunity in what gets left behind.
Charting ABNB: Some Home Repairs Needed
I readily admit that some of my best collared positions in 2025 were stocks I truly did not care for. And that's the beauty of collars. Because with a stock like ABNB, you can see in the daily chart just below that it is capable of making investors giddy, and then stealing their candy just days later.
Earlier this year, the stock popped 20% on earnings, then crashed 40% in a matter of weeks, along with the market. That tells me if I own ABNB at all, I better collar it.
That daily chart above looks like a sick puppy to me. The percent price oscillator (PPO) is dropping fast, along with the price trend structure itself (top section of chart). The 20-day moving average did not immediately break after earnings, but it soon will.
The weekly chart below is poised to go lower as well, if the PPO proves accurate. Remember that while technical analysis is in my opinion the best way to manage risk, risk can happen anywhere.
How to Collar Airbnb Stock
Ultimately, every investor is their own boss. So while ABNB is not a stock I'd put high on my buy list, that doesn't mean a collar approach doesn't fit. In fact, it fits well here.
That's a fairly straightforward 2:1 shot above. The prices of the options will shift a lot with the stock, so be sure to 'mark to market' any time you do this type of analysis. Especially when a stock is being tossed around by traders.
In this snapshot example, with the stock around $120, I could have set a $140-$115 range out to January 16, and it would have cost 3% of the stock price. That's $7.60 a share paid for the $115 strike puts and the $4.00 received in cash for those $140 calls. That produces a nice, albeit pedestrian 14% upside to 7% downside over that period.
Sometimes the best figure to look at with a collar is the stock price itself. So getting the options aspect out of our heads for a moment, here's a stock that traded as high as $143 a share on July 28. Getting to $140 within 5 months or so is certainly within range.
That's why sometimes, we just need to keep it simple: buy what you like, protect against the worst-case scenarios with options, and give it some time. Even when the market doesn't.
On the date of publication, Rob Isbitts did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
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