• Subscription Plans Available

    PayPal and All Major Credit Cards Accepted
    PayPal Logo

Free Earnings Trade of the Week: Red Hat, Inc. (RHT) – Reports After The Markets Close On Tuesday, 3/22/16

Red Hat, Inc. (RHT) is scheduled to report earnings after the markets close on Tuesday, 3/22/16.

Last quarter, the stock had the following price movement after reporting earnings:

Dec 18, 2015

83.01
83.99
80.45
81.40
7,692,400
81.40

Dec 17, 2015

78.81
79.34
77.66
78.86
2,688,600
78.86

(RHT) can be very unpredictable in terms of price movement post-earnings. A few keys to picking a strategy to use is the amount of movement allowed (up or down), strike price increments available, and the cost to place the trade. On this specific (RHT) trade, I think the Neutral Calendar Spread strategy is the right way to play this trade. The break-even points are very wide, and the price is very good. Even if the stock moves $5.00 + or more either way tomorrow, this trade will still do well and hold value even if it moves more than that, so I consider this trade very low risk with great potential. 9.5/10.

Note: I recommend placing this trade as soon as possible, as the value will most likely increase throughout the day. There is a possibility that the trade can be closed out for a profit by the end of the day if filled early. I will post that at the end of the trade details.

Here is how the trade is placed:

Entered Trade

Sell -25 RHT Apr16 75 Call

Buy 25 RHT May16 75 Call


Requirements

Cost/Proceeds
$1,875.00
Option Requirement
$0.00
Total Requirements
$1,875.00
Estimated Commission
$75.00

NBBO
0.40 – 1.10. Try to pay 0.75 or less for this trade. At a maximum, pay up to 0.85 if late.

If there is an opportunity to close out the trade early (taking less profit) if your order is filled at 0.80 or less, place the closing order out at 1.25 as a day order only.

I will post the price to close this order out tomorrow pre-market, right before the opening bell
RHT NCS 32216
See the attachment for the profit/loss chart.

Update 1: 9:25 am EST: Pre-market, the stock is down about $2.50/share, so using the Neutral Calendar Spread strategy looks very good here. I am placing the price to close the trade out at 1.90 for now. I will update any changes here, if needed.

Update 2: 1:05 pm EST. This trade is looking excellent right now. Time-decay and the current movement is going to increase value quickly. The price to close the trade out is still at $1.90.

A Look Ahead To Earnings Next Week, 3/14/16 – 3/18/16

Next week provides plenty of opportunities with earnings trades. Among the companies reporting are the following stocks I will be looking to trade:

Monday: JMBA

Tuesday: PLCE, DSW, FDS, JASO, ORCL

Wednesday: ATU, CMCM, CLC, FDX, GES, JBL

Thursday: ADBE

Friday: TIF

Free Earnings Trade of the Week: Intuit Inc. (INTU) – Reports After the Markets Close on Thursday, 2/25/16

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

106.28
108.00
101.17
103.20
6,622,300
102.88


Nov 19, 2015

96.93
97.68
95.79
97.42
3,985,900
97.12

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:

Entered Trade

Sell -30 INTU Mar16 100 Call

Buy 30 INTU Apr16 100 Call


Requirements

Cost/Proceeds
$1,800.00
Option Requirement
$0.00
Total Requirements
$1,800.00
Estimated Commission
$90.00

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.

INTU NCS 22516

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.

A Look Ahead To Earnings Next Week: 2/29/16 – 3/4/16

Here are the stocks I will be looking at to possibly trade next week for earnings. (Note: my earnings strategies are debit spreads that are neutral-based, such as the Neutral Calendar Spread, Reverse Iron Condor, Strangle/Straddle, and with occasional long positions placed). These strategies allow me to take a non-biased approach as to direction, where a trader can profit no matter which way the stocks moves after reporting earnings.

Monday:
BSFT,CROX, GLP, LL, WDAY

Tuesday:
BGFV, BOBE, DKS, DLTR, JKS, PGR, ROST, TIVO

Wednesday:
JOBS, COST, BREW

Thursday:
AVGO, BURL, CIEN, DMND, TFM, JOY, NMBL, PRFT, SWHC, SSI, KR, TSL, WING,

Friday: BIG

  • Subscribe to Blog via Email

    Enter your email address to subscribe to this blog and receive notifications of new posts by email.

    Join 115 other subscribers

  • Recommended Books on Amazon.com