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Daily Options Trading Strategy (DOTS) and Earnings Trades, Refer-A-Friend Subscription Match Plan, San Diego Seminar In June 2016

There have been some very quick in and out trades lately on the Daily Options Trading Strategy (DOTS). You can see the Trade Log at http://kevinmobrien.com/?page_id=480.

Also, earnings trades have also been going very well, some of which I post for free weekly here on my website such as Square (SQ), Red Hat (RHT), CarMax (KMX), and others. Each week, there are always plenty of trading opportunities with earnings releases, and when you use a neutral-based approach as I do, it takes the guessing game out of the equation as to which direction a security will move post-earnings.

Each subscription not only includes my daily DOTS trades, but access to the Trading Forum, where all earnings, weekly, and long-term trades are posted. But there is more than that: I answer questions all day while trading, as my style of trading offers the opportunity to directly communicate with subscribers and to answer any questions you may have throughout the day, along with interacting with many trader’s all over the world. Whether on Skype, Chatzy, or by e-mail, I am always available to help assist you in understanding stock options and trading.

I am offering a Refer-A-Friend Subscription Match Plan until next Friday, April 15,2016. On any subscription plan three (3) months or longer, I will match that for a friend or family member, so basically you can get the subscription at half price that way when referring someone.

On June 13 – 17, 2016, I will be having a seminar in San Diego, CA at the San Diego Convention Center that is both teaching and live trading debit spreads for earnings and weekly trades. If you are interested in these great trading strategies, you won’t find a better teacher of them, I can assure you. Here is the link to the seminar and more additional information: http://kevinmobrien.com/?page_id=1690. Each attendee also receives a free three (3) month subscription to my Trading Forum http://kevinmobrien.com/forum/index.php.

If you have any questions, please feel free to e-mail me anytime at: kmob79@gmail.com. Thanks again.

-Kevin

Free Earnings Trade of the Week: CarMax Inc. (KMX) – Reports Before The Markets Open 4/7/16

CarMax Inc. (KMX) is scheduled to report earnings before the markets open on Thursday, 4/7/16.

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

Dec 18, 2015

53.44
53.90
50.57
53.49
20,119,800
53.49

Dec 17, 2015

58.81
59.16
57.11
57.15
4,757,100
57.15

While the stock moved down a decent amount last quarter, it wasn’t too significant. Even if the stock were to repeat the same movement this quarter, the Neutral Calendar Spread strategy will do well. The current Implied Volatility on the April 2016 calls is 76, while the May 2016 calls are at 42, so this is an angle to take advantage of, especially on a non-volatile stock. I am giving this trade a 9/10.

Here is how the trade is placed:

Entered Trade

Sell -25 KMX Apr16 52.5 Call

Buy 25 KMX May16 52.5 Call


Requirements

Cost/Proceeds
$1,375.00
Option Requirement
$0.00
Total Requirements
$1,375.00
Estimated Commission
$75.00


Greeks / NBBO

IV
KMX Apr16
52.5 Call
76.21

KMX May16
42.02


NBBO
0.40 – 0.75. Try to pay 0.55 or less for this trade. At a maximum, pay up to 0.58. See the attachment for the profit/loss chart.

KMX NCS 4616

I will post the price to close this trade out tomorrow right before the opening bell.

Update 1: 9:25 am EST:
Pre-market, the stock is up about $1.70/share. It also had a bit of a run-up late yesterday before the markets closed, but nothing major. I am placing the price to close this trade out at $1.50 for now. I will update any changes here, if needed.

A Look Ahead To Earnings Next Week, 3/14/16 – 3/18/16

Next week provides plenty of opportunities with earnings trades. Among the companies reporting are the following stocks I will be looking to trade:

Monday: JMBA

Tuesday: PLCE, DSW, FDS, JASO, ORCL

Wednesday: ATU, CMCM, CLC, FDX, GES, JBL

Thursday: ADBE

Friday: TIF

Free Earnings Trade of the Week: Intuit Inc. (INTU) – Reports After the Markets Close on Thursday, 2/25/16

Intuit Inc. (INTU) is scheduled to report earnings after the markets close on Thursday, 2/25/16.

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

Nov 20, 2015

106.28
108.00
101.17
103.20
6,622,300
102.88


Nov 19, 2015

96.93
97.68
95.79
97.42
3,985,900
97.12

This stock has a history of initially making a somewhat large price move post-earnings, but then settles down to average a moderate move only. I am going to take advantage of this here, using a Neutral Calendar Spread. The current price to pay for this trade is excellent, especially on a higher-priced stock, if you can get it at my recommend price to pay for it. This trade has the potential to make a great ROI, and carries low risk, as it will retain value either way. 10/10.

Here is how the trade is placed:

Entered Trade

Sell -30 INTU Mar16 100 Call

Buy 30 INTU Apr16 100 Call


Requirements

Cost/Proceeds
$1,800.00
Option Requirement
$0.00
Total Requirements
$1,800.00
Estimated Commission
$90.00

NBBO
0.30 – 0.90. Try to pay 0.60 or less for this trade. At a maximum, pay up to 0.66.

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.

INTU NCS 22516

Update 1: 9:25 am EST:
Pre-market, the stock isn’t moving much at all, ideal for the Neutral Calendar Spread strategy. I am placing the price to close this trade out at 1.80. I will update any changes to this here, if needed.

Daily Options Trading Strategy (DOTS) Updated List – 2/22/16

Here is the current (4) tier list of the Daily Options Trading Strategy (DOTS), current as of 2/22/16:

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


Tier 2: BA, BABA, TWTR, FIT, FB, CRM, GPRO, C, FDX

Tier 3: BBY, EBAY, STZ, EXPE, CMG, AKAM, DIS, BWLD, PYPL

Tier 4: HD, COST, MNST, ULTA, JNUG, CAT, PX, GDDY, UPS

If you have any questions about the strategy, you can e-mail me at: kmob79@gmail.com

Free Earnings Trade Of The Week: The Walt Disney Company (DIS) – Reports After The Markets Close On Tuesday, 2/9/16

The Walt Disney Company (DIS) is scheduled to report earnings after the markets close on Tuesday, February 9, 2016.

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

Nov 6, 2015

114.60
116.75
114.57
115.67
16,803,400
115.67


Nov 5, 2015

113.26
113.93
111.60
113.00
14,843,700
113.00

Historically, (DIS) does not move a lot post-earnings. I like the Neutral Calendar Spread here, which is a strategy that takes advantage of overpriced options and time-decay. The current Implied Volatility (IV) on the February Week 2 expiration is 86.77, while the Implied Volatility on the February 2016 expiration is 54.02. I am expecting the stock this quarter to move around $2.00 -$2.50/share This fits in well with the Neutral Calendar Spread strategy, as the break-even points are wide and the potential ROI is also high. I am giving this trade a 9/10.

Here is how the trade is placed:

Entered Trade

Sell -25 DIS FebWk2 91 Call

Buy 25 DIS Feb16 91 Call


Requirements

Cost/Proceeds
$1,000.00
Option Requirement
$0.00
Total Requirements
$1,000.00
Estimated Commission
$75.00


Greeks / NBBO

IV

DIS FebWk2 91 Call

86.77

DIS Feb16 91 Call

54.02

NBBO 0.30 – 0.50. Try to pay 0.40 or less for this trade. At a maximum, pay up to 0.43.

See the attachment for the profit/loss chart. I will post the price to close this trade out tomorrow before the opening bell.

DIS NCS 2916

Update 1: 9:25 am EST
: I am placing the closing price at 0.80. I will update any changes to this here, if needed.

Update 2: 1:48 pm EST: This trade is looking very good. STC still at 0.80.

Update 3: 2/1116: Position Closed.

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: Red Hat, Inc. (RHT) – Earnings Trade – Reports After the Markets Close 12/17/15

Red Hat, Inc. (RHT) is scheduled to report earnings after the markets close on Thursday, December 17, 2015.

(RHT) price movement after reporting earnings has been unpredictable at times. Last quarter, the stock didn’t move too much at all, as this shows:

Sep 22, 2015

71.45
73.20
70.45
72.72
3,923,900
72.72

Sep 21, 2015

71.66
73.16
71.13
72.72
2,952,500
72.72

On the other hand, I have used Strangles on (RHT) many times before and have done extremely well. On specific stocks over the years, I have placed this strategy I will be using here. It is a Neutral Calendar Spread in combination with a Strangle that uses deep-out-of-the money calls and puts, along with at least month out expirations. The premise of the strategy is to immediately profit off the Neutral Calendar Spread, which in this case expires tomorrow, 12/18/15. The Strangle side can be looked at as a safety net and a potential big winner in the event the stock does make one its large price moves. Since this specific Neutral Calendar Spread trade allows plenty of price movement anyway at a great price, even if the stock make a big move, there is a good chance both sides will profit at some point.

To explain this strategy and how I expect to profit, look at it this way: Let’s assume that tomorrow pre-market, (RHT) isn’t doing much in terms of price movement. Maybe up or down $2.50 a share. This would be great, as the Neutral Calendar Spread would profit immediately (even quicker than usual since it’s expiring tomorrow). But what about the Strangle side, and how would that do? Since the price paid for the Strangle in this case is so minimal, the gains made by the Neutral Calendar Spread would more than wipe out any loss by either side of the Strangle. However, since the Strangle still has a month of time-value left on a volatile stock such as (RHT), it will still hold value quite well.

In the event that (RHT) makes a huge move, up or down, well, this would be even better, actually. Since the Strangle has that time-value, and the Strangle has unlimited profit on the call side, this would make even more than the NCS strategy. The same is similar with the put side on teh Strangle, only that a stock can only drop to zero. If the stock does make a large move, I will simply close out the Neutral Calendar Spread tomorrow before the markets close, probably fairly early in the day, just to close it out.

This is a unique options strategy, but you do have to very selective in which stocks to use this strategy with for an earnings trade.

Depending on your trading platform, you may have to enter each strategy separately. Most platforms will allow you to place it as one order. For simplification purposes, I will post each strategy and post what limit order should be placed for each, and as a whole.

Here is how the trade is placed:

Entered Trade: The Neutral Calendar Spread Side of the Trade (1)

Sell -10 RHT Dec15 77.5 Call

Buy 10 RHT Jan16 77.5 Call

Requirements

Cost/Proceeds
$750.00
Option Requirement
$0.00
Total Requirements
$750.00
Estimated Commission
$30.00

NBBO 0.50 – 0.95. Try to pay 0.75 or less for this side of the trade.

Entered Trade # 2: The Strangle Side

Buy 10 RHT Jan16 90 Call

Buy 10 RHT Jan16 65 Put


Requirements

Cost/Proceeds
$850.00
Option Requirement
$0.00
Total Requirements
$850.00
Estimated Commission
$30.00

NBBO 0.60 – 1.20. Try to pay 0.90 or less for this side of the trade. At a maximum, pay up to 0.95.


Entered Trade as One Order

Sell -10 RHT Dec15 77.5 Call

Buy 10 RHT Jan16 77.5 Call

Buy 10 RHT Jan16 90 Call

Buy 10 RHT Jan16 65 Put

Requirements

Cost/Proceeds
$1,650.00
Option Requirement
$0.00
Total Requirements
$1,650.00
Estimated Commission
$60.00

NBBO
1.20 – 2.25. Try to pay 1.70 or less for this trade. At a maximum, pay up to 1.75 for the entire order.

I will post the price to close the orders out tomorrow pre-market.

Update 1: 9:21 am EST: Pre-market, the stock is up around $6.00 a share. This is what I expected. On the NCS side of the trade, place the STC at 1.40. On the Strangle call side, this has some serious upside now, place the STC at $4.00. Leave the put side open for now. I’ll update this later.

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