• Subscription Plans Available – One Time Payment Only

    PayPal & All Major Credit Cards Accepted
    PayPal Logo

Free Trade of the Week: Cisco Systems, Inc. (CSCO) – Earnings Trade – After the markets close 11/13/13

Cisco Systems, Inc. (CSCO) is scheduled to report earnings after the markets close on Wednesday, November 13, 2013.

Historically, the stock has a tendency to move after-hours with a lot of volume. More recently (the past few quarters), there have been larger price moves than usual. Still, looking at the profit/loss chart, I see a great opportunity to use a Neutral Calendar Spread, as the break-even points are wide and I am anticipating about a $0.75 tomorrow either way.

While the trade does carry some risk in the event it moves a lot, I think this trade is priced very good and should do well. I recommend using a 4% allocation. The after-hours action is usually meaningless with this stock, similar to how Intel (INTC) trades after-hours.

Here is how the trade is placed:

Entered Trade

Sell -40 CSCO Nov13 24 Call
Buy 40 CSCO Dec13 24 Call

Requirements

Cost/Proceeds $840.00
Option Requirement $0.00
Total Requirements $840.00
Estimated Commission $120.00

Greeks / NBBO

Symbol Bid Ask IV Delta Gamma Vega Theta
CSCO Nov13
24 Call 0.48 0.49 82.47 -1,826.09 -1,092.05 -27.94 577.20
CSCO Dec13
24 Call 0.69 0.70 25.80 1,918.41 815.50 120.74 -43.26
Net 92.32 -276.55 92.80 533.94

NBBO 0.20 0.22. Try to pay 0.21 or less for this trade and up to 0.22. See the attachment for the profit/loss chart.

CSCO NCS 111313

 

 

Free Trade of the Week 11/1/2013 – Kellogg Company (K) – Earnings Trade-  Reports before the markets open 11/4/13
Kellogg Company (K) is scheduled to report earnings before the markets open on Monday, November 4, 2013.

This is the type of stock where little price movement is a normal occurrence after reporting earnings. This fits perfectly with a Neutral Calendar Spread strategy. Last quarter, the stock had the following price movement:

Aug 6, 2013 65.24 65.90 64.98 65.80 2,279,800 65.30
Aug 5, 2013 65.23 65.45 64.86 65.18 1,384,300 64.69

This trade is also priced great. It should do very well. I am recommending using at least a 5% allocation here, preferably more. Here is how the trade is placed:

Entered Trade

Sell -30 K Nov13 62.5 Call
Buy 30 K Dec13 62.5 Call

Requirements

Cost/Proceeds $750.00
Option Requirement $0.00
Total Requirements $750.00
Estimated Commission $90.00

Greeks / NBBO

Symbol Bid Ask IV Delta Gamma Vega Theta
K Nov13
62.5 Call 1.05 1.20 19.41 -1,689.85 -494.98 -145.37 103.58
K Dec13
62.5 Call 1.30 1.40 15.13 1,510.42 346.29 273.40 -44.67
Net -179.43 -148.69 128.03 58.91

NBBO 0.10 0.35. Try to pay 0.25 or less for this trade, and up to 0.30. See the attachment for the profit/loss chart.

 

K NCS 11413

 

Update: (K) is looking good pre-market. only up 1.78%> I have my order to close the trade in at $0.65.

 

Update: 11/7/13: The trade is doing well. Currently, the bid/ask is 0.30 – 0.50. Cost was 0.25. My target exit price is 0.55.

Bookmark the permalink.

One Response to

  1. Ron C. says:

    Looks good Kevin.

Leave a Reply

  • Subscribe to Blog via Email

    Enter your email address to subscribe to this blog and receive notifications of new posts by email.

    Join 115 other subscribers

  • Recommended Books on Amazon.com