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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

Daily Options Trading Strategy (DOTS) Updated List – 1/19/16

Here is the current (4) tier list of the Daily Options Trading Strategy, current as of 1/19/16:

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

Tier 2: BA, BABA, GPRO, IBM, CRM, TWTR, CHK, BBY, AKAM

Tier 3: C, MNST, PYPL, GDDY, EBAY, CMG, FIT, EXPE, STZ

Tier 4: , DIS, BWLD, CAT, FDX, HD, SHAK, COST, SNDK, ULTA

Earnings Trade of the Week: Intel Corp. (INTC) – Reports After The Markets Close – 1/14/16

Intel Corporation (INTC) is scheduled to report earnings after the markets close on Thursday, January 14, 2016.

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


Oct 14, 2015


31.39

32.93
30.85
32.80
75,954,800
32.57

Oct 13, 2015

32.03
32.48
31.98
32.04
35,588,600
31.82

(INTC) is a stock that historically does not make too much of a price move after reporting earnings. Also, tomorrow is expiration Friday, so using a strategy that takes advantage of time-decay and a lack of a large price move is the right strategy to use. For this trade, I will be placing a Neutral Calendar Spread. The current Implied Volatility On the January 2016 expiration (the sell side) is at 114, while the February expiration is only 31. This is always important when looking at the Neutral Calendar Spread: the discrepancy in the IV. It is a great indicator to show an overpriced option (the sell side). I am giving this trade a 10/10. It should profit immediately tomorrow morning, which is when I plan to close it out.

Here is how the trade is placed:

Entered Trade

Sell -25 INTC Jan16 32 Call

Buy 25 INTC Feb16 32 Call


Requirements

Cost/Proceeds

$925.00

Option Requirement

$0.00

Total Requirements

$925.00

Estimated Commission

$75.00


Greeks / NBBO

IV

INTC Jan16

32 Call

0.88

0.91

114.31

INTC Feb16

32 Call

31.30


NBBO
0.35 – 0.41. Try to pay 0.38 or less for this trade. At a maximum, pay up to 0.40. See the attachment for the profit/loss chart.

INTC NCS 11416

I will post the close order price tomorrow pre-market before the opening bell.

Update 1: 9:20 am EST: Pre-market, the stock is down 2.10 a share. I am expecting the stock to make a recovery during the day. I am placing the order to close this trade out at 0.65. I will update any changes here, if needed.


Update 2: 0.60 STC

Update 3: STC at 0.50.

Great Start Trading The New Year – Daily Options Trading Strategy (DOTS) – 1/4/16

Yesterday, we had 4 Daily Option Trading Strategy (DOTS) trades, all positions closed out. Each trade was a call position, showing that even in rough market conditions, the DOTS strategy does extremely well. 2008 and 2009 were some of my best years trading, providing plenty of call trades daily. The sell-to-close (STC) orders above the price paid per contract were increased on each trade more than the average, as the current market volatility will provide this. You can see my trade log for the times the trades were placed and the STC price for each trade.

2016 Market & Volatility Expectations – Daily Options Trading Strategy (DOTS)

I am expecting the markets to have a down year overall, with a lot of volatility daily. When using the Daily Options Trading Strategy (DOTS), I actually prefer this, as it tends to bring a lot more daily trades. I especially prefer when the markets open down, as there will always be more call buying opportunities, and the DOTS strategy does have more call trades than put trades on a percentage basis. This type of market volatility also brings increased sell-to-close (STC) orders. The DOTS strategy is unique in the sense that its performance is not based on how the markets overall are trading. It spots daily lows and highs extremely well. The key to the strategy is patience and not having a trigger-finger. However, when the 4 bottom indicator numbers and Bollinger Bands are all aligned for a trade, it must be made.

A few stocks on the DOTS list I like to move up this year are: FitBit (FIT), Twitter (TWTR, see a buyout possibility), and Alibaba (BABA).

For those unfamiliar with my subscription service, my daily Skype/Chatzy part of the subscription provides, in real-time, the DOTS trades I make. Before each trade, I provide the ticker symbol I am watching for a possible trade. This is when the Bollinger Bands start to expand and the indicator numbers are getting closer to a buy point. Once a trade is near, I once again provide the ticker symbol, the strike price, expiration date, my sell-to-close order (above the price paid per contract). Once an order is filled, the group chat and I provide what they paid per contract.

I also take questions all day from my subscribers via the mainchat or through personal Instant Messaging on Skype. It is very community-based.

The subscription also includes access to my Trading Forum, where I post my earnings trades, weekly trades, and long-term trades. These are great sources for added income.

All subscription plans come with a one week, money back guarantee if you are not happy with the service, no questions asked. If you have any questions, you can e-mail me at: kmob79@gmail.com.

Thanks, and Happy New Year.

-Kevin

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