Alon Rosin's Yelp Trade Ahead Of Earnings

Speaking on Bloomberg Markets, Alon Rosin suggested an options strategy in Yelp Inc YELP ahead of earnings.

The company is going to report earnings on Thursday and Rosin recommended a put backspread strategy for investors with a long position in the name. For a position of 500,000 shares, he would sell 2,500 contracts of the June 48 put and buy 7,500 contracts of the June 45 put for a total debit of $1 or $500,000.

If the stock gets crushed, the investors are going to be stopped out of the 500,000 shares long position through the extra 5,000 puts they own, explained Rosin.