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Free Earnings Trade of the Week: Whole Foods Market (WFM) – After the markets close 7/30/14

Whole Foods Market (WFM) – Earnings Trade – After the markets close 7/30/14

Whole Foods Market, Inc. (WFM) is scheduled to report earnings after thre markets close on Wednesday, July 30, 2014.Last quarter, the stock made a huge price move after reporting, as this shows:

May 7, 2014 39.28 39.48 37.31 38.93 49,122,000 38.81
May 6, 2014 48.33 48.54 47.87 47.95 9,435,700 47.80

The stock has really taken a beating lately, near a 52-week low. I do see this stock making a decent move today, somewhere around $3.00 – $4.00 tomorrow.

This trade is so cheap to place my eyes lit up when I put it through the trade calculator. Simply put, there is really little risk associated with this trade. It will hold value. 9/10. I should have placed this earlier, as it was going for a lot less than it is now.

This trade will once again be the Neutral Calendar Spread used two (2) times, just like the AMZN and PNRA trades.

Here is how the trade is placed:

Entered Trade #1: WFM

Sell -50 WFM AugWk1 42 Call
Buy 50 WFM Aug14 42 Call

Sell -50 WFM AugWk1 34 Put
Buy 50 WFM Aug14 34 Put

Requirements

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

Greeks / NBBO

Symbol Bid Ask IV Delta Gamma Vega Theta
WFM AugWk1
42 Call 0.47 0.51 148.56 -1,076.71 -347.41 -41.44 1,540.19
WFM Aug14
42 Call 0.61 0.69 58.92 1,230.67 333.71 126.30 -233.76
WFM AugWk1
34 Put 0.31 0.33 154.72 686.19 -250.37 -31.10 1,202.41
WFM Aug14
34 Put 0.38 0.44 59.73 -776.35 249.16 95.60 -177.56
Net 63.80 -14.91 149.36 2,331.28

NBBO 0.15 0.35. Try to pay 0.25 or less combined for both sides of the trade, and a maximum of 0.28. See the attachment for the profit/loss chart.

WFM NCS 2 73014

Free Trade of the Week: Harley-Davidson, Inc. (HOG) – Earnings Trade – Before the markets open 7/22/14

Harley-Davidson, Inc. (HOG) is scheduled to report earnings before the markets open on Tuesday, July 22, 2014.

This stock has always been a consistent winner for earnings trades.For whatever reason, the option strike prices are inflated, always expecting a large price move. While last quarter that did somewhat happen, it is very unusual for this stock to do so. This is an excellent stock for the Neutral Calendar Spread. Here are their last 4 quarters of movement after reporting earnings:

Apr 22, 2014 72.51 73.50 71.35 71.87 5,835,700 71.59
Apr 21, 2014 65.97 67.69 65.97 67.54 1,458,700 67.28

Jan 30, 2014 66.31 66.69 62.21 63.19 2,822,000 62.68
Jan 29, 2014 64.10 65.05 63.74 64.04 2,142,200 63.52

Oct 22, 2013 66.07 66.49 63.76 64.71 2,475,000 63.99
Oct 21, 2013 66.00 66.04 65.08 65.57 1,921,200 64.84

Jul 25, 2013 57.47 59.52 55.57 55.74 3,183,600 54.93
Jul 24, 2013 56.11 56.40 55.40 55.86 1,506,700 55.05

I am giving this trade a 9/10. The only negative is that is could be a little less expensive, was looking for around 0.50.

Here is how the trade is placed:

Entered Trade

Sell -25 HOG Aug14 67.5 Call
Buy 25 HOG Sep14 67.5 Call

Requirements

Cost/Proceeds $1,525.00
Option Requirement $0.00
Total Requirements $1,525.00
Estimated Commission $75.00

Greeks / NBBO

Symbol Bid Ask IV Delta Gamma Vega Theta
HOG Aug14
67.5 Call 1.91 2.02 30.39 -1,224.58 -186.82 -175.10 108.54
HOG Sep14
67.5 Call 2.46 2.68 26.21 1,224.04 140.43 270.13 -61.05
Net -0.54 -46.39 95.03 47.49

NBBO 0.44 0.77. Try to pay 0.61 or less for this trade. At a maximum, pay 0.64.

HOG NCS 72214

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