Electronic Arts (ERTS, $14.86, down $0.58) will report earnings on Tuesday and Wall Street is expecting 90 cents a share for the quarter. The company will report after the closing bell as they are on the left coast and will announce at 2PM (5PM stock market time). This will give you plenty of time to exit any trades before the earnings come out.
The February 15 puts (EZQNC, $1.15, up $0.25) were profiled at 90 cents and closed 25% higher as the stock fell to under $15 and set a new 52-week low of $14.66 in the process. The company warned the Street back in December that 2009’s prior expectations won’t be attainable because of weak holiday sales. EA is also restructuring its business so there is a good chance they fall short on their numbers.
You could set stops here at $1.00 and if the stock trends higher on Tuesday, you walk away with a 10% profit if the stop is hit. If the stock continues lower then you could raise your stops and then have a trailing stop going into earnings. In the final hour of trading you will have to make a choice if you want to close the position, sell half, or let it ride.
As far as the Spider Gold Shares (GLD, $88.84, down $2.47)…we either got in at great prices or we are catching a falling knife. The ETF (exchange-traded fund) traded lower for most of the day and I lowered the entry prices for the March 99 calls (GLDCU, $2.05, down $0.85) and the March 100 calls (GLDCV, $1.90, down $0.75). The limit orders were $2.25 for the 99’s and $2.00 for the 100’s but they closed much lower than this. Hopefully, you brought your limits down as they approached these entry points and you were filled at prices near the close. Set stops of $1.00 for the March 99 calls and 90 cents for the March 100 call options.
Google (GOOG, $340.57, up $2.04) was all over the map with after reveiling details of its Google Earth. The February 370 calls (GGDBN, $2.35, up $0.10) went on a run from $2.30 to $3.30 after I profiled them for a one of two day trade. It wasn’t quite a 50% return but it was close. Be careful if you are still in this one.