Earnings season is upon us and Brian has a safe play to limit your risk in the Options Market. Last Friday on CNBC, Brian took a look at replacing a stock. He feels YUM! is a good play here because it has seen plus or minus 5% moves post earnings for the last 4 quarters. The play here is to sell the Aug. 38 put and with those profits buy the Aug. 42 call. Here you collect 30 cents on the trade. You will profit if YUM! gaps above $42. If YUM! is below 38 you will be put to it and have to own the stock there, but Brian feels very comfortable in doing that because he feels $38 is a good area to get in.
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