Six Flags Entertainment Corporation (SIX) is scheduled to report earnings before the markets open on Wednesday, 10/26/16.
Last quarter, the stock had the following price movement after reporting earnings:
Jul 27, 2016
Jul 26, 2016
This is one of those trades where the price to place it alone makes it worth trading. Last quarter, (SIX) did not make a significant move at all, and while I am expecting the stock to move more this quarter, the break-even points on the P/L chart using a Neutral Calendar Spread strategy are very wide. The only minor issue regarding this trade is the lack of weekly options. other than that, this is an excellent set-up here. I am still giving this trade a 10/10 if you are able to get the order filled at my recommended price. It will retain value regardless how it moves tomorrow once the markets open.
Here is how the trade is placed:
Sell -50 SIX Nov16 50 Call
Buy 50 SIX Dec16 50 Call
NBBO 0.00 – 0.30. Try to pay 0.20 or less for this trade. At a maximum, pay up to 0.22. See the attachment for the profit/loss chart.
I will post the price to close this trade out tomorrow morning, right before the markets open
Update 1: 10/26/16, 9:25 am EST. – Pre-market, the stock is down $1.25/share. I am placing the price to close this trade out (net credit) at $0.50. I will update any changes here.
Update 2: 10/26/16. 10:10 am EST. This trade is in a good spot. Just need time-decay to kick in. Be patient with the trade. STC still at 0.50.
Update 3: STC *(net credit) now at 0.40