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Weekly Citigroup (C) Reverse Iron Condor Trade – Expires Next Friday, 2/26/16

Each week on Thursday morning, I place my Reverse Iron Condor trades. Citigroup (C) for years has been one of my favorite stocks to use this strategy with. A Reverse Iron Condor is a combination of a Bull Call Spread and a Bear Put Spread. There are 4 “legs” to this strategy. Last week’s Citigroup trade closed out a a 100 % profit, as is usually the case. The key to this strategy is to place it each week, as the compounded gains yearly add up to a very nice profit. I do not recommend trading it one week, and then skipping the next. These trades are also very inexpensive to place, so a great source of additional income weekly, and they require little monitoring. Once the stock starts moving in a specific direction, I will post the price to close out the profitable side of the trade.

Here is how the trade is placed:

Entered Trade

Buy 100 C FebWk4 38 Put

Sell -100 C FebWk4 37 Put

Buy 100 C FebWk4 41 Call

Sell -100 C FebWk4 42 Call

Requirements

Cost/Proceeds
$3,600.00
Option Requirement
$0.00
Total Requirements
$3,600.00
Estimated Commission
$600.00


NBBO
0.23 – 0.49. Try to pay 0.36 or less for this trade. At a maximum, pay up to 0.39. See the attachment for the profit/loss chart.

Q C RIC 21816

Update 1: 8:25 am EST 2/22/16. (C) is up 0.70 pre-market. I am placing the price to close the call side of this trade (bull call spread) at $0.85. On the put side, leave that open for now. There are times where both sides of the trade can profit weekly, and you do not want to sell one side too early.

Update 2: 3:05 pm EST
: STC on the put side at 0.70. On the call side, place the STC at 0.60, day order only.Will update this trade pre-market tomorrow morning

Update 3:
2/24/16: STC at 1.00 on the put side of this trade. On the call side

A Look Ahead To Next Weeks Earnings – 2/15/16 – 2/19/16

Here are the stocks I will be looking at next week to trade for earnings:

Tuesday: CAKE, DTLK, ESRX, FOSL, PSA, RAX

Wednesday: ADI, BLMN, BRCD, CF, DPS, GDDY, JACK, LZB, NVDA, ASGN, PGR

Thursday:
CRMT, BJRI, SAM, DISH, FLS, FLR, MGM, SODA, WMT, WM

Friday: B, DE, VFC

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 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

Weekly Trades and Strategies That Require Less Time Management – 9/17/15

For traders that are busy and do not have time to trade daily, I also have weekly trades such as the Reverse Iron Condor and Neutral Calendar Spreads. TheseĀ  trades are very easy to manage and do not require constant monitoring. I post these trades usually on Thursday mornings before noon EST in the Trading Forum at http://kevinmobrien.com/forum/index.php. The Reverse Iron Condors have an expiration the following Friday using weekly options. For example, today I placed a Reverse Iron Condor on Citigroup (C) and the SPDR Gold Shares (GLD), and they expire on 9/25/15. Usually, they take about 3 trading days to close the position, sometimes a day sooner or later. I post updates on the sell-to-close orders as the positions begin to move. These trades are very inexpensive to place, and consistently provide a great source of profits on a yearly basis. I have many articles on Seeking Alpha on these strategies if you would like to learn more about them.

Other weekly Reverse Iron Condor candidates are iShares Silver Trust (SLV) and the (VXX).

If you have a busy schedule, definitely check these strategies out.

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