Five ways to trade next week’s ‘Magnificent Seven’ earnings
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Next week will be the busiest of the earnings season, yet five companies will garner the most attention from investors. More than 160 S & P 500 names are due to report next week. Among them will be five of the "Magnificent Seven" members: Apple , Microsoft , Amazon , Alphabet and Meta Platforms . Those five account for a quarter of the total market cap in the S & P 500, giving them extra importance for the index. Their results come during a critical period for the overall stock market. The S & P 500 notched a fresh intraday record on Thursday, but ended the session lower as uncertainty around the U.S.-Iran war weighed on sentiment. To be sure, Scott Rubner of Citadel Securities thinks the backdrop remains favorable for stocks, as most corporate blackout periods end and companies can issue buybacks. This provides "a meaningful tailwind for incremental demand. U.S. corporates have already authorized ~$452bn year-to-date, the strongest start on record," he wrote earlier this week. Rubner laid out five call option spreads traders can use to play next week's news. Call spreads involve buying and selling call options on one asset at the same expiration date, though with different strike prices. This allows traders to capture gains while reducing risk. Here are the trades: Buy MSFT May 455/490 call spread Buy AMZN May 270/290 call spread Buy GOOGL May 355/375 call spread Buy META May 725/765 call spread Buy AAPL May 280/295 call spread "While the rebound in large-cap tech has been significant, the combination of lighter positioning, supportive valuations, and a highly concentrated earnings calendar leaves room for further upside, best expressed through convex structures into earnings," wrote Rubner.