Intuit Inc. (INTU) is scheduled to report earnings after the markets close on Thursday, 2/25/16.
Last quarter, the stock had the following price movement after reporting earnings:
Nov 20, 2015
Nov 19, 2015
This stock has a history of initially making a somewhat large price move post-earnings, but then settles down to average a moderate move only. I am going to take advantage of this here, using a Neutral Calendar Spread. The current price to pay for this trade is excellent, especially on a higher-priced stock, if you can get it at my recommend price to pay for it. This trade has the potential to make a great ROI, and carries low risk, as it will retain value either way. 10/10.
Here is how the trade is placed:
Sell -30 INTU Mar16 100 Call
Buy 30 INTU Apr16 100 Call
NBBO 0.30 – 0.90. Try to pay 0.60 or less for this trade. At a maximum, pay up to 0.66.
See the attachment for the profit/loss chart.
I will post the price to close this trade out tomorrow morning, right before the opening bell.
Update 1: 9:25 am EST: Pre-market, the stock isn’t moving much at all, ideal for the Neutral Calendar Spread strategy. I am placing the price to close this trade out at 1.80. I will update any changes to this here, if needed.