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Free EarningsTrade of the Week: Ciena Corporation – Reports 12/12/13

Ciena Corporation (CIEN) – Earnings Trade – Before the markets open 12/12/13
Ciena Corporation (CIEN) is scheduled to report earnings before the markets open on Thursday, December 12, 2013.

This stock has a history of making some big price moves after reporting. However, there have been other times where I’ve also seen it have very little movement, as the last two reports show:

Sep 4, 2013 22.35 23.66 21.97 23.54 18,296,200 23.54
Sep 3, 2013 20.31 20.92 20.28 20.68 7,795,900 20.68

Jun 6, 2013 18.45 19.19 18.17 19.15 24,069,600 19.15
Jun 5, 2013 16.45 16.60 16.21 16.31 5,574,000 16.31

A Strangle or Neutral Calendar Spread are risky to trade if only using one over the other. This earnings trade is a good candidate for a Double Neutral Calendar Spread/Strangle combination, where we can profit numerous ways. This is a solid trade and should do well. 8/10.

When placing this trade, always make sure that the Neutral Calendar Spread is filled before the Strangle. To clarify how to trade this, I will separate each strategy individually. Here is how it is placed:

Entered Trade #1: The Neutral Calendar Spread

Sell -10 CIEN Dec13 23 Call
Buy 10 CIEN Jan14 23 Call
NBBO 0.31 0.43. Try to pay 0.37 or less for this side of the trade, and up to 0.38.

Entered Trade #2: The Strangle

Buy 5 CIEN Jan14 25 Call
Buy 5 CIEN Jan14 21 Put
NBBO 1.76 1.83 , Try to pay 1.80 or less for this trade. With a Strangle strategy, a nickel or more to pay is no big deal, so if this price changes, pay more to make sure you get into the trade.

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2 Responses to Free EarningsTrade of the Week: Ciena Corporation – Reports 12/12/13

  1. Ron C. says:

    Looks good Kevin. I got into the Neutral Calendar Spread at .35 and the strangle at 1.80.

  2. Ron C. says:

    Kevin, with CIEN down over 8% is it a good idea to go ahead and sell the Jan Calls?

    I still have the Jan. calls on CIEN. I will update this later. STC order on Strangle calls at 0.8, puts at 1.15, and the NCS at 1.00

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