Bulls Pushing Green Ahead of 3-Day Weekend/ Special Promotion
1:55pm (EST)
We mentioned we would cover strangle option trades in more detail today as we have profiled a number of high double and triple-digit winners over the past several weeks.
The Earnings Section in our Weekly Wrap profiles a bevy of possible option trades based on our research on stocks that could move 10%-20% in a day.
Annie’s (BNNY, $36.26, down $0.66) came into the week at $41.96 and we said to expect a 10% move. Shares fell to $38 on Tuesday after Monday’s earnings announcement and under $35 on Wednesday and Thursday. This was a 15% drop.
The February 40 puts (BNNY140222P00040000, $3.50, up $0.20) came into the week at 65 cents and peaked near $5 midweek while the February 45 calls (BNNY140222C00045000, $0.05, flat) were at 50 cents and will likely expire worthless. The puts and calls together would have cost around $1.15, or $115, on Monday’s open. At current levels, the trade is up over 200% and could have made over 400% if managed correctly.
Trimble Navigation (TRMB, $37.32, up $0.40) was just under $32 on Monday’s open and we said shares would zoom past $34 or fall below $29 on Tuesday afternoon’s earnings.
We said a great way to play the earnings move was with a strangle option trade with the February 32.50 calls (TRMB140222C00032500, $5.00, up $0.50) and the February 30 puts (TRMB140222P00030000, $0.05, down $0.05).
The February 32.50 calls were at 85 cents and have surged over 400% for the week while the February 30 puts were at 50 cents and will likely expire worthless. This trade would have cost $1.35, or $135, for one contract of each aforementioned call and put option. With the calls pushing $5, they have easily offset the loss in the puts.
Another stock that made a monster move was Sketchers U.S.A. (SKX, $35.33, down $0.43). Shares were up nearly 20% yesterday following their earnings announcement after the move from just under $30 to $36.
We have followed this company for years and have traded it in the past. We have been both bullish and bearish on the stock.
Shares were at $28.99 to start the week and we mentioned they have been volatile of late. We also said Sketchers usually makes dramatic moves around earnings and that a strangle (or straddle) option trade might be the best way to play the earnings announcement.
The February 30 calls (SKX140222C00032000, $5.40, down $0.45) came into Monday’s open at 90 cents and soared 314% yesterday after pushing a high of $6.
This trade could have been maxed out for a little more if we had left off the February 28 puts (SKX140222P00028000, $0.05, flat) at 75 cents but we would have wanted them as protection as Sketchers has posted sketchy earnings in the past.
Cliffs Natural Resources (CLF, $23.21, up $1.31) started the week at $20.82 and we talked about their upcoming earnings that would be coming out after Thursday’s close.
The February 22 calls (CLF140222C00022000, $1.35, up $0.50) were at 65 cents on Monday morning and were going for 85 cents into yesterday’s close. They have traded up to $1.62 today as shares reached $23.50.
The February 19 puts (CLF140222P00019000, $0.04, down $0.12) were at 52 cents. Although they have taken a hit, this trade would have returned nice double-digits.
We listed a few of these earnings trades in the Daily but many more possibilities in our Weekly Wrap. We have added more support to our research team that concentrates on stocks that will be making the biggest moves for the week and we have been profiling strangle option trades to make sure everyone is familiar with them and how they work.
We have recommended strangle and straddle option trades in the past for the Weekly Wrap and we will be getting aggressive with them in the coming months and into 2014.
The Weekly Wrap newsletter is supported by a group of talented writers and researchers and has a stunning 93-8 record since inception. We recently started introducing LEAP trades and we have already had some big winners this year.
We are trying to get the word out on our Weekly Wrap as it lacks the buzz our Daily newsletter creates but packs the same powerful punch. We often group the Weekly Wrap with the Daily 1-year subscription in our yearend December promotion along with our option trading course, How to Trade Options on Momentum Stocks.
The cost for all 3 products would be $2,743. A discounted yearly subscription to the Daily is $924, and the Weekly Wrap for a year is $924. The option trading course is $895 and it comes with a library full of past trades videos.
The 2014 edition of the option trading course has already shipped so if you are a current subscriber and have upgraded, you should have the materials by now with a password to view videos. If you haven’t received them, please email our support team.
Now, we do have extra copies as demand was great and we had to do a second run. We are going to do the same special through Monday until midnight as a Valentine/ President Day promotion. The deal is this.
You can upgrade your membership to a 1-year for the Daily and you will receive the Weekly Wrap and the option trading course, at no charge. We are also taking an extra $125 off!
The Daily Annual Subscription is priced at $789 (Reg. $924) this weekend only! You can use this coupon code for either the Daily or Weekly 1-year option.
Coupon code: 9AD21
Associate with: Members Area – Annual Recurring Subscription Only $924 for 12 months. Save $240. NEW PRICE – $789!
The option trading course is shipped to you at no charge.
We also realize some of you may not be able to afford this amount all at once so if you need to make 2 (or 3) payments, email us and we can work with you. We also take checks.
We are also offering 6-month subscriptions to the Weekly Wrap for 50% off. This coupon DOES NOT include the Daily or option trading course.
Weekly Wrap 6 Month Recurring 50% off:
Coupon code: E7298
Associate with: Weekly Wrap – 6 Month Subscription Only $462 for 6 months. You will only be billed $231.
We urge current members to upgrade to this special offer as we will not run another promotion until December.
As far as the market, the action has been mixed as Tech and the small-caps have been lagging but all 4 of the major indexes are showing gains.
The Dow is up 117 points to 16,144 while the S&P 500 is higher by 8 points to 1,838. The Nasdaq is advancing 4 points to 4,245 while the Russell 2000 is popping a tenth of a point to 1,147.86.
We have some last minute updates before the weekend hits and we will be back Monday night with the Weekly Wrap and on Tuesday morning with the Daily. Until then, have a great weekend everyone!
