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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

Very Active Trading This Week Using The Daily Options Trading Strategy (DOTS)

It has been a busy week using the Daily Options Trading Strategy (DOTS). You can see the trade log at http://kevinmobrien.com/?page_id=480, where I provide the date, time, ticker symbol, expiration date, price paid, and the sell-to-close (STC) price above what was paid per contract. All of these trades are posted in real-time in the Skype/Chatzy chatrooms daily.

If you have any questions about the strategy or stock options in general, you can e-mail me anytime at: kmob79@gmail.com

Also, I provide a free copy of my book on Bollinger Bands and how to use this technical indicator to trade options (and stocks) daily. Just send me an e-mail and I will send you a copy in PDF format.

Thanks.

-Kevin

Daily Options Trading Strategy (DOTS) Updated List – 2/22/16

Here is the current (4) tier list of the Daily Options Trading Strategy (DOTS), current as of 2/22/16:

Tier 1: AAPL, AMZN, BIDU, IBM, GOOGL, LNKD, NFLX, PCLN, TSLA


Tier 2: BA, BABA, TWTR, FIT, FB, CRM, GPRO, C, FDX

Tier 3: BBY, EBAY, STZ, EXPE, CMG, AKAM, DIS, BWLD, PYPL

Tier 4: HD, COST, MNST, ULTA, JNUG, CAT, PX, GDDY, UPS

If you have any questions about the strategy, you can e-mail me at: kmob79@gmail.com

Trading In Volatile and Down Market Days Using the Daily Options Trading Strategy (DOTS)

I am often asked how I trade in market conditions that are unpredictable and volatile, especially down markets? My answer is simple: I really do not care what the markets are doing in terms of direction when using the Daily Options Trading Strategy (DOTS). When I check pre-market news and the futures data, I actually prefer to see the markets open down. This is usually a good sign that there will be some early call option trades that are quick in and outs.

Some investors and traders tend to flee and sell their long call or stock positions when they see the markets moving the way they are lately. I see opportunities. THE DOTS strategy has a resiliency and rigor to it that is unique. Just by looking at the trade log on my website, http://kevinmobrien.com/?page_id=480, you will see that most of the trades made are call positions. This was also the case in 2008 and 2009, my best years ever trading the DOTS. It would seem that buying puts would have been the way to go then, but not using the DOTS. Even on a stock like Citigroup (C) and other financial related securities in 2008/2009, which were falling precipitously daily, the DOTS still provided plenty of call buying opportunities daily. The way the strategy is structured, with the Bollinger Bands and the bottom 4 indicators (the Relative Strength Index, the Intraday Momentum Index, the Money Flow Index, and the Full Stochastic Oscillator, with the settings and parameters I use for each) prove to be very adept at spotting true lows daily in a given security. In fact, put trades were very rare during that time, and they still are now.

The settings used for each indicator are crucial to the success of the strategy. When I began developing the strategy, I went through every setting possible with each indicator in tandem. What I use now is the way to best use this strategy and has held up so well after all these years, under every market condition. From trading after the post September 11th attacks, the mortgage crisis and the banks, Greece and the Eurozone problems, oil fluctuations, and now with the current volatility daily. The bottom line is that the strategy works.

This strategy keeps the emotion out of trades. This is a very important aspect of it. It also requires patience and discipline. My point of this post is to not stop trading because of how the current market landscape is or what it will be in the future.

Like any trading strategy, repetition only expedites and enhances the ability to spot great trading opportunities. This is especially true when understanding the Bollinger Bands when using the Daily Options Trading Strategy. The bottom four indicators (the RSI, IMI, MFI, and the FSO) are static, in that once their respective buy points are reached, there is nothing else to look for on them. The Bollinger Bands are the most important element of the strategy. They provide a trader with great insight into the future movement of the stock and the volatility. The Bollinger Bands also show when to avoid a a trade, which is extremely important. If anyone is interested in a PDF file of my book on Bollinger Bands for free, you can e-mail me at: kmob79@gmail.com. . For day trading purposes using the DOTS, I prefer the settings as shown below:

BB 21716

TWTR DOTS 21716

One of the benefits of my subscription service is that I do all of the work for you ahead of each trade. Before each possible trade, I post the ticker symbol, the strike price, expiration, and my sell-to-close (STC) price ahead of each trade. I do all of the necessary “homework” before hand: checking any news that may be related to the stock, the daily highs and lows, the bid/ask prices, and the daily volume. My subscription service is not just an e-mail that tells you what to trade when it is far too late. This is real-time live trading, with me on Skype and Chatzy from 8:00 am EST until the markets close, and later. Along with the trades, I am always answering questions that any subscriber may have. I have a policy that if you are not happy with the service after one full week of trading, I will refund your subscription with no questions asked whatsoever.

If you have any questions about the daily strategy, the subscription, or any general questions about trading, please e-mail me anytime at: kmob79@gmail.com.

-K

Free Earnings Trade Of The Week: The Walt Disney Company (DIS) – Reports After The Markets Close On Tuesday, 2/9/16

The Walt Disney Company (DIS) is scheduled to report earnings after the markets close on Tuesday, February 9, 2016.

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

Nov 6, 2015

114.60
116.75
114.57
115.67
16,803,400
115.67


Nov 5, 2015

113.26
113.93
111.60
113.00
14,843,700
113.00

Historically, (DIS) does not move a lot post-earnings. I like the Neutral Calendar Spread here, which is a strategy that takes advantage of overpriced options and time-decay. The current Implied Volatility (IV) on the February Week 2 expiration is 86.77, while the Implied Volatility on the February 2016 expiration is 54.02. I am expecting the stock this quarter to move around $2.00 -$2.50/share This fits in well with the Neutral Calendar Spread strategy, as the break-even points are wide and the potential ROI is also high. I am giving this trade a 9/10.

Here is how the trade is placed:

Entered Trade

Sell -25 DIS FebWk2 91 Call

Buy 25 DIS Feb16 91 Call


Requirements

Cost/Proceeds
$1,000.00
Option Requirement
$0.00
Total Requirements
$1,000.00
Estimated Commission
$75.00


Greeks / NBBO

IV

DIS FebWk2 91 Call

86.77

DIS Feb16 91 Call

54.02

NBBO 0.30 – 0.50. Try to pay 0.40 or less for this trade. At a maximum, pay up to 0.43.

See the attachment for the profit/loss chart. I will post the price to close this trade out tomorrow before the opening bell.

DIS NCS 2916

Update 1: 9:25 am EST
: I am placing the closing price at 0.80. I will update any changes to this here, if needed.

Update 2: 1:48 pm EST: This trade is looking very good. STC still at 0.80.

Update 3: 2/1116: Position Closed.

Very Active Trading Day on Wednesday, 2/3/16

There have been a lot of very good trades today, all call positions. You can see the these on the Daily Trade Log at http://kevinmobrien.com/?page_id=480.

The Daily Options Trading Strategy (DOTS) does remarkably well in rough market conditions, especially down markets, as there tends to be more trading opportunities than usual, especially call option trades.

One earnings trade today on (GPRO), reports after the bell.

Earnings Trade of the Week: eBay Inc. (EBAY) – Reports After the Markets Close On 1/27/16

eBay Inc. (EBAY) – Earnings Trade – After the markets close 1/27/16

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

Oct 22, 2015

26.50
27.66
26.26
27.58
44,605,900
27.58

Oct 21, 2015

24.56
24.70
24.18
24.21
16,881,400
24.21

The Neutral Calendar Spread strategy on this trade is beyond cheap to place. In fact, I haven’t seen such a low cost to place this strategy on any stock in quite some time. It simply has to be placed. Even if it were more expensive, I would still use it, as the break-even points are wide, and the possible ROI is very good. This is a 10/10. A must trade.

Here is how the trade is placed: (Note: I am using 100 contracts personally, you do not have to do the same)

Entered Trade

Sell -100 EBAY JanWk5 26.5 Call

Buy 100 EBAY Feb16 26.5 Call

Requirements

Cost/Proceeds
$1,200.00
Option Requirement
$0.00
Total Requirements
$1,200.00
Estimated Commission
$300.00

NBBO
0.12 – 0.16. Try to pay 0.14 or less for this trade. At a maximum, pay up to 0.17. Try to get in this trade immediately, the price may not last long.

See the attachment for the profit/loss chart.

EBAY NCS 12716

I will post the price to close this trade out tomorrow morning, right before the opening bell.

Update 1: 9:25 am EST. I am placing the close price at 0.40

Very Busy Week for Earnings & Trading Opportunities, January 25 – 29, 2016

This week especially is loaded with earnings, so there should be plenty of trading opportunities. Among the stocks reporting earnings this week that I will to trade are the following:

AAPL, BABA, AMZN, PKG, PII, LMT, BA, DFS, FB, TXN, SWI, JNPR, JNJ, T, BBOX, COF, NVR, ABAX, PYPL, CAT, EA, HOG, LLL, MKC, MSFT, V, CVX, HON, MA, PX, STX,

Almost all of my earnings trades are neutral-based, meaning that I do not choose a specific direction. This allows a trader to profit regardless if the stock moves up or down post-earnings. Strategies that I like to use for earnings are the Neutral Calendar Spread, the Reverse Iron Condor, Strangle/Straddle, and occasionally the Long Put Butterfly Spread.

Next week should be very busy as well for earnings.

I am offering discounted subscription plans until January 31, 2016. If you have any questions, you can e-mail me at: kmob79@gmail.com

Free Earnings Trade of the Week: Netflix, Inc. (NFLX) – Reports After The Markets Close 1/19/16

Netflix, Inc. (NFLX) is scheduled to report earnings after the markets close on Tuesday, January 19, 2016.

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


Oct 15, 2015

103.77
104.88
99.10
101.09
48,484,300
101.09

Oct 14, 2015

111.50
111.63
108.05
110.23
33,231,500
110.23

NFLX has been a very volatile stock lately, it has been having up days on really down market days, and vice versa. I think this quarter, the stock is going to make a bigger than usual price move. However, I want to give myself some time on this trade so the Implied Volatility drop that happens post-earnings won’t effect the price of the options too much. I will be using a Strangle strategy with out-of-the-money options and March 2016 expiration dates. This provides a lot of time-value, and should the stock make a big move, up or down, this trade will do extremely well. Even if the stock makes only a $10.00 price move, I do not see the price of the options deteriorating much at all as they have almost 2 months until they expire. While this trade is not cheap to place (using 7 contracts only on each leg), there is not much risk overall. 9/10.

Here is how the trade is placed:

Entered Trade

Buy 7 NFLX Mar16 130 Call

Buy 7 NFLX Mar16 85 Put


Requirements

Cost/Proceeds
$4,480.00
Option Requirement
$0.00
Total Requirements
$4,480.00
Estimated Commission
$21.00

NBBO
6.30 – 6.55. Try to pay 6.45 or less for this trade. At a maximum, pay up to 6.55. I will post the STC orders tomorrow, right before the opening bell.

Update 1: 9:24 am EST
: After-hours yesterday, the stock made a big move, but is currently only up about $2.00/share, most likely due to the futures being down. I am placing the STC on the call side at $9.00, as the earnings report was very good, so expecting it to move back up. On the put side, place the STC at 7.00 for now. I will be updating this trade frequently here.

Update 2: STC on the puts at 9.00


Update 3: NFLX falling, place the STC on the puts at 11.00 now. Will continue updating as needed.

Update 4: 9:40 am EST. STC at 10.00 on the put side. STC at 7.00 on the call side.

Earnings Trade Possibilities for the Week of 1/19/16 – 1/22/16

Tuesday: AMD, CREE, IBM, NFLX

Wednesday
: FFIV, GS, KMI, PCP, SLM

Thursday
: AXP, ETFC, ISRG, SBUX, LUV, UAL, VZ

Friday
: GE

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