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Earnings Season Starts This Week – Will Be a Busy Few Weeks Trading

With Alcoa (AA) and the big bank stocks reporting earnings this week (C), (JPM), (WFC), the next month will be full of earnings trades. I use trading strategies that take a neutral approach towards earnings. These include the Strangle, the Reverse Iron Condor, and the Neutral Calendar Spread.

There are still a couple of days left for the reduced subscription rates + match plan that I am offering.

If you have any questions about options or the strategies mentioned above, please e-mail me at: kmob79@gmail.com

Thanks.

-Kevin

Very Busy Trading Day Using the Daily Options Trading Strategy on Thursday, June 16, 2016.

Today, 6/16/16, was a very busy day using the Daily Options Trading Strategy (DOTS). Here is the list of trades made and closed out already.

550. Thursday, 6/16/16. TSLA at 9:41 am EST. 0.70 STC order above price paid/contract. July 215.00 calls. Paid 9.85 per contract.
551. Thursday, 6/16/16. BA at 9:51 am EST. 0.25 STC order above price paid/contract. July 130.00 calls. Paid 2.35 per contract.
552. Thursday, 6/16/16. FIT at 9:57 am EST. Original STC at 0.15 (Sold at break-even). July 13.00 calls. Paid 0.75 per contract.
553. Thursday, 6/16/16. FB at 10:04 am EST. 0.30 STC order above price paid/contract. July 115.00 calls. Paid 2.55 per contract.
554. Thursday, 6/16/16. BABA at 10:06 am EST. 0.30 STC order above price paid/contract. July 75.00 calls. Paid 3.50 per contract.
555. Thursday, 6/16/16. BIDU at 11:01 am EST. 0.60 STC order above price paid/contract. July 165.00 puts. Paid 7.00 per contract.

Here is the link to my Daily Trade Log using the DOTS: http://kevinmobrien.com/?page_id=480

This strategy works great in up or down markets, but actually prefer the markets to open down, as this presents more call buying opportunities. Overall, 5 call trades and one put trade so far…

The subscription service provides all of these trades in real-time, using Skype and Chatzy simultaneously, providing you with the ticker symbol, expiration date, STC (sell-to-close price above what is paid per contract) in advance of each trade, and when the position is closed out and at what price. The subscription also includes access to the Trading Forum, where I post my Weekly and Earnings trades, along with some long-term trades.

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

Thanks again.

-Kevin

Updated Daily Options Trading Strategy (DOTS) List of Securities Used – Current as of 6/15/16

Here is the current list of stocks I use for the Daily Options Trading Strategy (DOTS). Updated on Wednesday, June 15, 2016. I have removed (LNKD) from Tier 1 due to Microsoft’s acquisition of LinkedIn http://www.cnbc.com/2016/06/14/microsoft-got-linkedin-users-at-a-discount.html?__source=yahoo%7Cfinance%7Cheadline%7Cheadline%7Cstory&par=yahoo&doc=103711613 and replaced it with (BABA):

Tier 1: AAPL, AMZN, BIDU, GOOGL, NFLX, FB, PCLN, BABA, TSLA

Tier 2: BA, ULTA, TWTR, CMG, SQ, IBM, GPRO, FIT, V

Tier 3: DIS, EXPE, FFIV, CRM, DPZ, FDX, PANW, STZ, PX

Tier 4: BWLD, COST, UPS, MNST, AVGO, HD, PII, INTU, LULU

Earnings Trade of the Week: PVH Corp. (PVH) Reports Earnings After The Markets Close On 5/25/16

PVH Corp. (PVH) is scheduled to report earnings after the markets close on Wednesday, 5/25/16.

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


Mar 24, 2016

92.43
95.25
90.69
94.29
3,632,200
94.25

Mar 23, 2016

88.30
88.96
87.42
87.63
1,677,800
87.59

(PVH) has been a consistent winner over the years using a Neutral Calendar Spread, which I will also use here. I like this trade a lot. It has wide break-even points. If the stock only makes a marginal price move post-earnings, this trade will do extremely well, and still has plenty of room even if it moves more than expected. I am giving this trade a 9.5/10. Here is how the trade is placed:

Entered Trade

Sell -15 PVH Jun16 90 Call

Buy 15 PVH Jul16 90 Call

Requirements

Cost/Proceeds
$1,200.00
Option Requirement
$0.00
Total Requirements
$1,200.00
Estimated Commission
$45.00

NBBO
0.50 – 1.10. Try to pay 0.80 or less for this trade. At a maximum, pay up to 0.90. See the attachment for the profit/loss chart.

PVH NCS 52416

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

Update 1: 9:25 am EST on 5/26/16: I am placing the price to close this trade out (net credit) at $1.60. I will update any changes to this here, as needed.
Update 2: 3:20 pm EST on 5/26/16: I am increasing the price to close this trade out (net credit) to 1.70.
Update 3: 1:05 pm EST on 5/27/16: Current price to close this trade out now at $1.60.

Earnings Trade of the Week: Skechers U.S.A., Inc. (SKX) – Reports After The Markets Close On Thursday, 4/21/16

Skechers U.S.A., Inc. (SKX) is scheduled to report earnings after the markets close on Thursday, 4/21/16.

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

Feb 11, 2016

29.30
30.35
26.35
28.24
12,018,500
28.24


Feb 10, 2016

27.23
28.14
27.01
27.17
4,247,300
27.17

The Implied Volatility (IV) on the weekly April Week 4 expiration at-the-money strike is a extremely high 301.69, compared to the May 2016 at-the-money strike of 66.77. Clearly, there is a big price move expected in relation to the share price. I don’t think it happens. Just as last quarter, the stock really didn’t move too much, and while I expect it to do more than that this quarter, a trader has to take advantage of past history and an elevated IV level as this trade has, which will again be a Neutral Calendar Spread. This trade, as mentioned, has weekly options, is priced very good, and a lot of factors working in its favor. It will also hold value very well even in the event it moves more than expected post-earnings. I am giving this trade a 10/10. A must trade.

Here is how the trade is placed:

Entered Trade

Sell -75 SKX AprWk4 30 Call

Buy 75 SKX May16 30 Call

Requirements

Cost/Proceeds
$2,850.00
Option Requirement
$0.00
Total Requirements
$2,850.00
Estimated Commission
$225.00


Greeks / NBBO

SKX AprWk4
30 Call
301.69

SKX May16
30 Call
66.77

NBBO
0.25 – 0.50. Try to pay 0.38 or less for this trade. At a maximum, pay up to 0.41.

See the attachment for the profit/loss chart.

SKX NCS 42116

Update 1: 4/22/16, 9:20 am EST: Pre-market, the stock is up $2.20/share. I am placing the price to close this trade out (net credit) at 1.00. I will update any changes here, if needed.

Update 2 9:34 am EST: : Price to close this trade out now at 0.85.

Current Daily Options Trading Strategy (DOTS) List – Updated 4/18/16

Here is the current list of stocks I use for the Daily Options Trading Strategy (DOTS). Updated on Monday, April 18, 2016:

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

Tier 2: BA, BABA, TWTR, CMG, SQ, IBM, GPRO, FIT, V


Tier 3: DIS, EXPE, FFIV, CRM, DPZ, FDX, PANW, STZ, PX


Tier 4: BWLD, COST, UPS, MNST, AVGO, HD, NTES, INTU, ULTA

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.

San Diego, CA Seminar : Trading Earnings and Weeklies Using Debit Spreads (June 13 -17, 2016)

I will be holding a seminar in San Diego, CA from June 13th – June 17th, 2016 (Monday – Friday) on how to trade Earnings and Weeklies using Debit Spreads. The strategies being discussed and trading are the Neutral Calendar Spread, the Double Neutral Calendar Spread (a synthetic Strangle), Reverse Iron Condor, and Straddles/Strangles.

The cost of the seminar is $799.00 and includes a three (3) month subscription to my Trading Forum (where all earnings and weekly trades are posted) and to my Skype chatroom.

These strategies are neutral-based in that there is no preference for a specific direction a stock moves post-earnings. I have been trading these for many years and have also taught many other traders how to use these profitable strategies.

The Neutral Calendar Spread in particular is a great strategy that can be placed at a minimal cost and brings a very high return on investment. This strategy takes advantage of high Implied Volatility (over-priced options), a lack of a big price move ( it still has wide break-even points), and time-decay. For whatever reason, this strategy is under-used by many traders. During the seminar, I will be teaching this strategy in-depth and what to look for when spotting potential trades. I will also show when it is best to avoid this strategy for earnings an earnings trade. The Neutral Calendar Spread also hold value very well even if the stock moves more than expected post-earnings. For those who cannot trade full-time, this strategy does not require a lot of time management, as companies report earnings either before the markets open or after they close, so it is very easy to set your price to close the trade out well ahead of the bell.

The Reverse Iron Condor is different than the Neutral Calendar Spread in that it does require a stock/security to to make a pre-determined price move, up or down. Choosing the right strike prices is crucial to the success of this strategy. Strike price increments available on a specific security are also very important when using this strategy. What I like about this strategy is it is a lot less expensive to place than the Straddle or Strangle and requires less movement. The potential gains are capped, however, and known at he time of placement. On the same hand, once the security moves past the required strike price(s) to gain maximum return on investment, it can immediately be closed out. I also like to trade this strategy with securities that have weekly options, such as Citigroup (C) and the SPDR Gold Shares (GLD), among others.

The Straddle and Strangle are strategies that require a large price move to profit. A Straddle is when you buy both call and put options with at-the-money strike prices. The Strangle is buying both calls and puts with out-of-the-money strike prices. The benefits of these strategies is that there is unlimited profit potential on the call side and a high profit potential on the put side. When accurately predicting a large price move on the Straddle or Strangle, the ROI can be very significant. The drawbacks of using these strategies is that they are generally a lot more expensive to place than the Neutral Calendar Spread or the Reverse Iron Condor. If you place a Straddle, for example, and the stock fails to move much post-earnings, you will be looking at a significant loss. This is why I prefer to buy longer term expiration dates to give the trade plenty of time to make the necessary move to profit in case it initially does not. While you will pay more for this time-value, I look at it as a security blanket. Using weekly options with the Straddle or Strangle is very risky. Another strategy I use is called the Double Neutral Calendar Spread, which is similar to the Strangle, but can be placed at a fraction of the price. It requires buying two (2) Neutral Calendar Spreads, a call side and a put side, both using out-of-the money strike prices. The strategy is very unique, and while there aren’t a lot of opportunities to trade it, when there are this strategy works great.

The seminar will go into great detail on all of these strategies and we will be trading them live. I guarantee you will leave the seminar with full knowledge on how to trade them successfully. After the seminar, you will have full access to the Trading Forum and my Skype chatroom where I answer any questions you may have throughout the day.

The seminar starts at 5:45 am Pacific Time on Monday, June 13th, 2016 and will meet each day throughout the week at the same time each morning until Friday, June 17, 2016. Each day, the seminar will last until 2:00 pm Pacific Time.. I will be catering breakfast Monday through Friday.

Once registered, I will promptly e-mail you a receipt of payment and for admission to the seminar.

The seminar will be held at the San Diego Convention Center:

111 West Harbor Drive, San Diego, CA 92101

http://visitsandiego.com/

If you have any questions, you can contact me anytime at kmob79@gmail.com

Free Earnings Trade of the Week: Square, Inc. (SQ) – Earnings/Long-Term Trade – Expires June 2016

Square, Inc. (SQ) is scheduled to report earnings after the markets close on Wednesday, 3/9/16.

This trade is both an earnings and long-term trade combo. It expires in June 2016. I have been meaning to buy some (SQ) calls for a while, and with earnings due after the bell today, see an opportunity here. Even if the stock should drop post-earnings, the time-value of this trade will hold value in these calls. If the stock should make a significant move upward, this trade has the potential to turn out extremely well. 9/10.

Entered Trade

Buy 10 SQ Jun16 11 Call


Requirements

Cost/Proceeds
$1,650.00
Option Requirement
$0.00
Total Requirements
$1,650.00
Estimated Commission
$15.00

NBBO
1.35 – 2.00. Try to pay 1.65 or less for this trade. At a maximum, pay up to 1.80. I will post the STC tomorrow before the opening bell.

Update 1: 3:55 pm EST. I I am in this trade at 1.65. Already a nice gain, could sell. But with this amount of time left, June exp. will keep it.
Update 2: 9:25 am EST 3/10/16 : Pre-market, the stock is up about $0.20/share. The earnings report was good, and I see this stock continuing to rise. With a lot of time-value left on this trade, I am placing the STC at $4.00 on the calls, as I see the stock heading towards $15.00/share in the near-term future. I will be updating this trade periodically if there are any changes to the STC.
Update 3: 3:34 pm EST 3/10/16: STC still at $4.00. The stock dropped a little bit, nothing significant. Should make a move upward soon. I do not recommend selling anything short of $3.00 if you do not plan to get $4.00.

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