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Free Earnings Trade of the Week: Brocade Communications (BRCD) – Reports after the markets close on Thursday, February 13, 2014

Brocade Inc. (BRCD) – Earnings Trade – After the markets close 2/13/14

Brocade Communications Systems, Inc. (BRCD) is scheduled to report earnings after the markets close on Thursday, February 13, 2014.

Last quarter, the stock had the following price movement:

Nov 19, 2013 8.30 8.91 8.21 8.77 15,343,300 8.77
Nov 18, 2013 8.12 8.16 8.06 8.10 7,146,800 8.10

and the quarter before…

Aug 14, 2013 7.86 8.04 7.64 7.99 32,485,000 7.99
Aug 13, 2013 6.91 6.94 6.80 6.90 7,393,300 6.90

I am going to place a Strangle on this trade, using March 2014 expirations. Not an expensive trade to place, and the stock is usually good for at least a 12% price move. 7/10. Here is how to place the trade:

Entered Trade

Buy 10 BRCD Mar14 10 Call
Buy 10 BRCD Mar14 9 Put

Requirements

Cost/Proceeds $590.00
Option Requirement $0.00
Total Requirements $590.00
Estimated Commission $30.00

Greeks / NBBO

Symbol Bid Ask IV Delta Gamma Vega Theta
BRCD Mar14
10 Call 0.24 0.25 42.01 325.57 292.62 10.55 -6.23
BRCD Mar14
9 Put 0.33 0.36 43.30 -366.95 296.79 11.03 -6.53
Net -41.38 589.41 21.58 -12.76

NBBO 0.57 0.61. Try to pay 0.59 or less for this trade.

Daily Options Trading Strategy (DOTS) Updated List: Current as of 2/9/14

Daily Options Trading Strategy (DOTS) – Updated List/Tiers

Tier 1:

Apple (AAPL)

Baidu (BIDU)

CF Industries (CF)

Amazon.com (AMZN)

Google (GOOG)

LinkedIn (LNKD)

Netflix (NFLX)

Priceline.com (PCLN)

Tesla Motors (TSLA)

 

Tier 2:

Facebook (FB)

Green Mountain Coffee Roasters (GMCR)

Twitter (TWTR)

Wynn Resorts (WYNN)

Sina Corp. (SINA)

Yelp (YELP)

F5 networks (FFIV)

VMware (VMW)

Chipotle Mexican Grill (CMG)

 

Tier 3:

Zillow (Z)

Fossil Group (FOSL)

Visa (V)

Buffalo Wild Wings (BWLD)

AthenaHealth (ATHN)

Intuitive Surgical (ISRG)

Mastercard (MA)

Ralph Lauren (RL)

Ulta Salon (ULTA)

Tier 4:

Citigroup (C )

Pandora (P)

Expedia (EXPE)

TripAdvisor (TRIP)

Las Vegas Sands (LVS)

Lululemon (LULU)

International Business Machines (IBM)

Salesforce.com (CRM)

SanDisk (SNDK)

 

Free Trade of the Week: Ralph Lauren Corp. (RL) – Earnings Trade- Before the markets open 2/5/14

Ralph Lauren Corp, (RL) – Earnings Trade- Before the markets open 2/5/14

Ralph Lauren Corporation (RL) is scheduled to report earnings before the markets open on Wednesday, February 5, 2014.

The stock has had the following price movement the last two quarters after reporting earnings:

Nov 6, 2013 180.00 180.78 176.81 180.52 3,249,500 180.06
Nov 5, 2013 169.71 173.32 169.61 171.19 1,961,700 170.75

Aug 7, 2013 177.06 180.76 172.01 173.13 3,092,900 172.27
Aug 6, 2013 187.36 189.80 186.01 189.51 881,400 188.56

This trade is similar to the Estee Lauder trade I posted earlier, and it is also priced reasonable well. There are very good break-even points on this one, as well. The Neutral Calendar Spread will be used again here. The stock has a major tendency to move a lot pre-market, then settle down and move up/down only modestly, which is when I plan to close it out tomorrow. A solid trade, 8/10.

Here is how the trade is placed:

Entered Trade

Sell -10 RL Feb14 155 Call
Buy 10 RL Mar14 155 Call

Requirements

Cost/Proceeds $700.00
Option Requirement $0.00
Total Requirements $700.00
Estimated Commission $30.00

Greeks / NBBO

Symbol Bid Ask IV Delta Gamma Vega Theta
RL Feb14
155 Call 6.70 7.20 52.78 -518.40 -22.61 -133.08 208.61
RL Mar14
155 Call 7.60 7.90 35.88 523.64 20.43 216.37 -88.26
Net 5.24 -2.18 83.29 120.35

NBBO 0.40 1.20. Try to pay 0.80 or less for this trade. At a maximum, pay 0.90.

See the attachment for the profit/loss chart.RL NCS 2514

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