I would like to make another suggestion today and it will be a debit spread on one of the market leaders. The stock is Microsoft Corp. (MSFT).
MSFT reports on October 21st, after the close.
My suggestion is to trade the October monthly expiration options, which is October 16th.
This gives the stock about two weeks to make a move.
Here is how you open the position:
Buy to Open October 21st - $207.50 Call for $6.15
Sell to Open October 21st - $212.50 Call for $3.85
The net debit will be $2.30 per spread.
Based on the tracking portfolio, I suggest you limit the trade to a 2 lot or 1.4% of the portfolio.
The maximum gain on a six lot would be $1,620 or 117%.