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Very Active Trading Day for the DOTS on Tuesday, 11/24/15

Today, especially early, saw a lot of volatility early. Four trades were placed, all closed out already. I also missed two trades on AAPL and TSLA that would have worked out very well, but they all were happening right around the same time, so took the trades on the better looking charts at the moment, but all were good. These trades happened between 10:14 am EST – 10:35 am EST. You can see my Trade Log Page for more details on the specifics of each trade.

Earnings Trade of the Week – Nimble Storage (NMBL) – Reports After the Markets Close 11/19/15

Nimble Storage, Inc. (NMBL) is scheduled to report earnings after the markets close on Thursday, November 19, 2015.

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

Aug 26, 2015

24.84
27.13
24.25
26.72
2,025,100
26.72

Aug 25, 2015

24.16
24.96
23.61
23.83
876,800
23.83

Currently, the Implied Volatility (IV) on the November at-the-money strike price is an unreal 280, compared to an IV of 73 on the December at-the-money strike, This is a big difference, suggesting the November strike price is very overpriced. I am going to take advantage of the high IV on this trade by using a Neutral Calendar Spread, a strategy that profits when time-decay takes place and raised IV levels. I am giving this trade a solid 9/10. It is also going for a good price.

Here s how the trade is placed:

Entered Trade

Sell -20 NMBL Nov15 20 Call

Buy 20 NMBL Dec15 20 Call

Requirements

Cost/Proceeds
$860.00
Option Requirement
$0.00
Total Requirements
$860.00
Estimated Commission
$60.00


Greeks / NBBO

Symbol

IV
20 Call

280.78

NMBL Dec15

20 Call

70.66

NBBO 0.15 – 0.70. Try to pay 0.43 or less for this trade. At a maximum, pay up to 0.47. See the attachment for the profit/loss chart.

NMBL NCS 111915

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

Update 1 Pre-market, 9:20 am EST: Pre-market, the stock is getting crushed. Down over $9.00/share, this was unexpected. The stock may rebound, though, and the NCS strategy does retain value. I am placing the STC at 0.25, but will update this throughout the day as needed.
Update 2: STC order now at 0.20.

Earnings Trade of the Week: El Pollo Loco Holdings, Inc. (LOCO) – Reports After the Markets Close on Thursday, November 12, 2015.

El Pollo Loco Holdings, Inc. (LOCO) is scheduled to report earnings after the markets close on Thursday, November 12, 2015.

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

Aug 14, 2015

14.81
15.35
14.55
14.56
8,756,700
14.56

Aug 13, 2015

18.04
18.83
17.78
18.36
2,494,000
18.36

(LOCO) should make a sizable move post-earnings, and a Strangle strategy, using December expirations, are going for a great price. This is a very low risk trade with a ton of upside. Highly recommend trading it. 10/10.

Here is how the trade is placed:

Entered Trade

Buy 10 LOCO Dec15 13 Call

Buy 10 LOCO Dec15 11 Put

Requirements

Cost/Proceeds
$1,250.00
Option Requirement
$0.00
Total Requirements
$1,250.00
Estimated Commission
$30.00

NBBO 1.05 – 1.45. Try to pay 1.25 or less for this trade. At a maximum, pay up to 1.35. I will post the STC orders pre-market tomorrow morning.

Update 1: 9:17 am EST: Pre-market, the stock is down about $1.75/share. I am placing the STC order on the puts at 3.00. On the call side, leave it open for now, as there is a lot of time-value left, and we don’t want to sell it for basically nothing. I will update the STC orders on both sides as needed.

Earnings Trade of the Week: Shake Shack Inc. (SHAK) – -Reports After the Markets Close 11/5/15

Shake Shack Inc. (SHAK) – Earnings Trade – After the markets close 11/5/15

Shake Shack Inc. (SHAK) is scheduled to report earnings after the markets close on Thursday, November 5, 2015.

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

Aug 11, 2015
75.04
75.90
67.50
68.56
2,679,300
68.56

Aug 10, 2015
72.67
73.10
66.71
70.64
2,028,400
70.64

(SHAK) has been a very volatile stock since it became public. The 52-week range is $38.64 – $96.75. I am fully expecting the stock to make a big move post-earnings. I will be using a Strangle strategy. Here is how the trade is placed:

Entered Trade

Buy 10 SHAK Nov15 52 Call

Buy 10 SHAK Nov15 45 Put

Requirements

Option Requirement
$0.00
Total Requirements
$3,200.00
Estimated Commission
$30.00

NBBO 2.80 – 3.60. Try to pay 3.20 or less for this trade. At a maximum, pay up to 3.35. I will post my Sell-to-close orders on both sides of this trade pre-market tomorrow morning.

Update 1: 9:23 am EST:
Pre-market, the stock is up about $2.50/share. I am placing the STC on the calls at $6.00. On the put side, place the STC at $1.00 for now. I will update any changes to this here.

Update 2: STC on the puts at 2.50. I will update any changes to this here.
Update: STC on the put side now at 4.00

3 Quick In-and-Out Daily Trades Today, Getting Plenty of Action 11/3/15

The three trades placed today were on LNKD puts at 10:24 am EST, position closed 13 minutes later; BABA calls at 10:44 am EST, position closed 11 minutes later; and AMZN calls at 10:46 am EST, position closed 35 minutes later.

The daily trades are picking up even more lately, but always a consistent number of trades happen weekly, regardless of market conditions. The daily strategy (DOTS) does require patience, but you really don’t need to be glued to a computer screen non-stop, as the Bollinger Bands provide great insight as to when a trade is looming. If you have any questions on the strategy, you camn leave a comment or e-mail me at: kmob79@gmail.com

Earnings Trade Possibilities For the Week of 11/2/15 – 11/6/15

Here are the following stocks which are reporting earnings this week and are possible trades using Neutral-based strategies such as the Strangle, Neutral Calendar Spread, and the Reverse Iron Condor:

Monday – (ALL)

Tuesday –(ATVI), (TSLA), (HLF), (K), (RRGB), (PZZA)

Wednesday – (FB), (QCOM), (RIG), (BSFT), (WFM)

Thursday – (MNST), (SEAS), (SHAK), (TTWO), (APA), (DIS)

Friday – (CI), (HUM)

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