12:20pm (EST) Research In Motion (RIMM, $87.24, up $2.38) is rocking-and-rolling ahead of Thursday’s big earnings announcement. Wall Street is expecting a good report card from the company as the average estimate calls for RIMM to earn $1 a share for the quarter. In the year ago quarter, the company earned 86 cents a share. Revenue is seen coming in at $3.6-$3.7 billion versus $2.6 billion. From everything I have been researched, it looks like the company will come in at $1.05 a share on revenue as high as $3.9 billion. The increase in earnings show just how much momentum the smartphone market has. Note: Earnings come out after the market close on Thursday. Subscribers are currently up 40% on the RIMM option trade that was profiled in the Members Area last Friday and Monday. We are approaching the first exit target for the trade and we are about 10 cents away from hitting it. I said if the stock hits $86-$87 then our target should be hit. Bingo. Since earnings come out after the bell on Thursday we can continue to hold the options for another day at least. However, our goal is to close half the trade once we hit our target and then see how we are looking on the other half in the 1pm update on Thursday. The other side of that coin is this. We have a number of new subscribers that joined us over the weekend and this week. Depending on your entry price for the trade, many of you are up 40%-50% in three days. Now think about that for a minute. Especially, if you are a new option trader. Where else are you going to find a 50% return in 3 days? You can cash in now and look for another trade. This is how you build your option portfolio or your trading business. Once you have a steady run of profits, then you can do different things with your trades. This is when you are able to close half the trade after a 50% gain and then let the rest ride. I still don’t know how the stock will react the rest of the day, Thursday, or on Friday…no one does, but I want to prepare you for all of the possible outcomes. There is also the chance the stock heads even higher and we exit the entire trade for a 100% return before earnings. There is also the risk of the stock retreating from current levels and investors could “sell the news” before or after the company announces earnings. Either way, the stock could move 10% once the news is out which gives us a $9 swing. If you are on the wrong side of the trade once earnings are released it will hit you harder than a Vegas headache. So protect yourself and make sure you look at all the angles over the next 24 hours. Current Subscribers, I will update all of the trades tonight and have the playbook ready in the morning in the Members Area. Rick@MomentumOptionsTrading.com]]>
