The Long and Short of Paychex, Inc. (PAYX)

Shares of Paychex, Inc. PAYX are lower on the session by 1.03%, currently trading at $26.95. The company is scheduled to report earnings later today, after the closing bell. For a full earnings preview, including technical breakdown, earnings/guidance estimates, and volatility metrics, please click here. Playing stocks into earnings is often considered flat out gambling, but if done right, traders can take advantage of near-term discrepancies in price to reap large rewards. Feeling lucky? Here are few trade setups to voice your bear or bull opinion… Bulls: The bulls will note that the stock recently rebounded off of support and is sitting near a key break out level at $27.29. A bullish trade might implement the following trade: buy the October $27/28 call spread for a net debit of $0.40. Max gain is $0.60 (+150%) if shares trade above $28.00. Max loss is limited to the cost of the trade, $0.40. Bears: Bears will note that, due to the stocks recent rally, the stock is overbought and due to pullback towards support at $25.00. A bearish trade might implement the following trade: buy the October $27.00 put outright for a net debit of $0.70. If the stock does move lower on earnings, one could then sell the $25.00 put in enhance the yield of the trade. Wondering how Benzinga's Chief Options Strategist is playing Paychex, Inc.? Click here to find out…he recently called Best Buy's better-than-expected earnings and made subscribers 2,300% on their options position. No…that's not a typo.