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
Oct 21, 2015
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)
Sell -100 EBAY JanWk5 26.5 Call
Buy 100 EBAY Feb16 26.5 Call
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.
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