Why I’m Bullish on PayPal Ahead of Earnings
Why I’m Bullish on PayPal Ahead of Earnings
The fintech could be a silent winner in the U.S.-China trade war
It’s not often I look at a beaten-down tech name and say, “Now we’re talking”—but that’s exactly where I am with PayPal (PYPL) right now. Amid the market sell-off, the company is finally looking interesting—especially with implied volatility (IV) popping off and earnings just around the corner.
Tech’s been crushed—but that’s an opportunity
PayPal, like many growth-oriented names, hasn’t been spared from the pressure bearing down on the market. The company’s down significantly from its highs, and panic over inflation, interest rates and the general tech unwind is already priced into the stock.
But here’s the thing: Great companies don't stay down forever, especially the ones with strong balance sheets, dominant platforms and a rebound catalyst like earnings. Which brings me to volatility—something of key importance.
The implied volatility rank (IV rank) is sitting at 90. That’s a clear signal the options market is pricing in a ton of movement ahead—meaning premiums are juicy and volatility is overpriced relative to historical levels.
That’s exactly the kind of setup I like when I’m looking to get long with defined risk. With earnings on deck later this month, I’m anticipating PayPal could surprise to the upside—or at least that the worst-case sentiment is already baked in.
The market tends to overprice risk going into earnings—especially when a stock is already trading near support or multi-year lows. That creates opportunity for premium sellers who know how to play it smart.
My Trade: Selling 30-delta OTM put spreads
Here’s what I’m looking to do: Sell out-of-the-money put spreads, specifically around the 30-delta mark. These spreads give me a defined-risk bullish exposure, and I’m positioned to benefit if PayPal stays above my short strike—or even if it just doesn’t implode. Thanks to elevated IV, I’m getting paid well for the risk I’m taking.
In other words, I don’t need for PayPal to rally huge—I just need it not to collapse, and the trade can still be profitable.
PayPal Rebound from Tariff Pause Boosts Long Put Spread
After news was released that there would be a 90-day pause on tariffs, PayPal experienced a significant rebound. This positive shift in sentiment has made me more comfortable with my PayPal long put spread position. The market's reaction to this news supports the strategy, and I'm now more confident in holding the position.Risk management note
As always, I’m managing risk tightly. I’m not betting the farm on earnings—just taking a smart, high-probability stance with a structure that protects me on the downside.
If IV keeps climbing, I may even scale into a few more spreads at staggered strikes.
PayPal is one of those names where sentiment can turn fast. Once it starts getting love again, the move can be sharp—and I want to be positioned before that happens, not after.
With IV Rank at 90 and earnings on April 29, this is a rare moment when options sellers have the edge, and I’m leaning into it.
Errol Coleman appears on the tastylive network shows Today’s Assignment and Trades on the Go.
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