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Free Earnings Trade of the Week: Six Flags Entertainment (SIX) – Reports Before the Markets Open 10/26/16

Six Flags Entertainment Corporation (SIX) is scheduled to report earnings before the markets open on Wednesday, 10/26/16.

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


Jul 27, 2016

56.16
58.30
56.00
56.69
3,912,700
56.02

Jul 26, 2016

59.22
60.00
58.85
59.46
1,378,000
58.75

This is one of those trades where the price to place it alone makes it worth trading. Last quarter, (SIX) did not make a significant move at all, and while I am expecting the stock to move more this quarter, the break-even points on the P/L chart using a Neutral Calendar Spread strategy are very wide. The only minor issue regarding this trade is the lack of weekly options. other than that, this is an excellent set-up here. I am still giving this trade a 10/10 if you are able to get the order filled at my recommended price. It will retain value regardless how it moves tomorrow once the markets open.

Here is how the trade is placed:

Entered Trade

Sell -50 SIX Nov16 50 Call

Buy 50 SIX Dec16 50 Call

Requirements

Cost/Proceeds
$1,000.00
Option Requirement
$0.00
Total Requirements
$1,000.00
Estimated Commission
$125.00

NBBO
0.00 – 0.30. Try to pay 0.20 or less for this trade. At a maximum, pay up to 0.22. See the attachment for the profit/loss chart.

I will post the price to close this trade out tomorrow morning, right before the markets open

six-ncs-102516

Update 1: 10/26/16, 9:25 am EST. – Pre-market, the stock is down $1.25/share. I am placing the price to close this trade out (net credit) at $0.50. I will update any changes here.

Update 2: 10/26/16. 10:10 am EST. This trade is in a good spot. Just need time-decay to kick in. Be patient with the trade. STC still at 0.50.

Update 3: STC *(net credit) now at 0.40

Excellent Week Trading Earnings & The Daily Options Trading Strategy (DOTS)

Is has been a great week so far both with the start of Earnings Season and the Daily Options Trading Strategy (DOTS). Here is the list of DOTS trades so far this week (10/17/16 – 10/20/16):

630. Monday, 10/17/16. AMZN at 9:41 am EST. 1.50 STC order above price paid/contract. November 815.00 calls. Group chat paid an average of 32.85 per contract.
631. Monday, 10/17/16. ULTA at 9:47 am EST. 0.60 STC order above price paid/contract. November 260.00 calls. Paid 7.60 per contract.
632. Tuesday, 10/18/16. TSLA at 1:14 pm EST. 0.70 STC order above price paid/contract. November 195.00 calls. Paid 10.30 per contract. Quick trade.
633. Tuesday, 10/18/16. TSLA at 1:20 pm EST. 2.20 STC order above price paid/contract. November 195.00 calls Paid 9.60 per contract. Used a Trailing Stop.
634. Wednesday, 10/19/16. NUGT at 10:18 am EST. 0.25 STC order above price paid/contract. November 13.00 calls. Paid 2.45 per contract.
635. Wednesday, 10/19/16. ULTA at 10:01 am EST. 0.44 STC order above price paid/contract. November 255.00 calls. Paid 6.16 per contract.
636. Thursday, 10/20/16. BIDU at 9:39 am EST. 0.55 STC order above price paid/contract. November 175.00 calls, Paid 7.75 per contract.
637. Thursday, 10/20/16. TSLA at 9:41 am EST. 0.90 STC order above price paid/contract. November 200.00 calls. Paid 8.75 per contract.
638. Thursday, 10/20/16. AAPL at 10:40 am EST. 0.30 STC order above price paid/contract. November 115.00 calls. Paid 3.90 per contract.

You can see the Daily Trade Log at the top of the page.

As far as earnings, every trade so far this week has been a winner (already closed out). I also placed 3 new Earnings trades today.

earnings-kob-oct-week-3

Next week is stacked with earnings, one of the biggest weeks really in the next few months. During slow periods today, I was preparing for a busy week next week.

I have reduced the subscription rates during the busy period during earnings season (until October 31st).

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

Thanks again.

-Kevin

Free Earnings Trade of the Week Starts Back Tomorrow

I will be posting a free Earnings Trade of the Week starting tomorrow and will post at least one trade per week here on the website. I will try to post each trade by 11:45 am EST but no later than 2:00 pm EST (depending on the stock/pricing, etc.). There are a lot of companies reporting tomorrow after the markets close, so will definitely have at least few trades to place. Yesterday’s Strangle on Netflix (NFLX), which I mentioned in an earlier post this morning, netted a 150% return on the call side, which I sold already. I still have the put side with one month of time-value.

My trading style is to close out profitable trades as soon as possible, and that was a great trade at a good price to pay at $3.10. I thought when initially looking at different strike prices that it would cost more than that. The pricing of options, and especially on the Straddle/Strangle strategy, are critical to their success.

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

Thanks.

CBOE’s Useful IVolatility Tool – Website Link

One tool I like to use with stock options, especially on Straddle or Strangle trades, but also long-term trades, is the Chicago Board Options Exchange IVolatility options calculator/pricer. The link is here: www.cboe.com/framed/IVolframed.aspx?content=http%3a%2f%2fcboe.ivolatility.com%2fcalc%2findex.j%3fcontract%3dC44A90FE-8D3F-4F26-A1EA-AAB6AB7CB180&sectionName=SEC_TRADING_TOOLS&title=CBOE%20-%20IVolatility%20Services.

This calculator allows trader’s to put in a ticker symbol and choose their own parameters, such as the strike price, expiration date, current volatility percentage, and the current share price in relation to the strike price. One this information is added in, the calculator will then compute all of the parameters and show the estimated (very accurate) price for both the call and put options. This is especially handy for new option traders, but also very useful for options that have a longer expiration date and time-value left.

I am frequently asked how do I know what a good price to place the sell-to-close order should be on strategies such as the Straddle/Strangle, which has both call and put options placed simultaneously, a neutral-based strategy.

Yesterday, 10/17/16, I placed a Strangle on Netflix (NFLX), using November $115.00 strike price calls and November $85.00 put options. The stock was trading at $100.00/share at the time of placement and fill. I paid $3.10 to place this trade. Since there is about a month of time-value left on both legs of the strategy, I do not want to sell either side of the trade too low. Pre-market on Tuesday, the stock is up about $18.50 a share, so I have a general idea of what the call side will be trading at just based on experience and the intrinsic value alone, but the put side may also still have some value, especially should there be a pull back on the stock.

One important thing: after earnings, the Implied Volatility of a given security will drop. This is because the news is already out as to the results post-earnings and the uncertainty is mostly removed as to what direction the stock will move. When using the IVolatility calculator, as a general rule, I like to lower the volatility percentage about 20 points. So if the chart on the calculator had a volatility percentage of 58 pre-earnings, use 38 when you input the new information. This may be too much, or too little, but it will give you a good idea as to the average drop of volatility. I do this pre-market.

On earnings trades, you can always use trailing stops if you think the trade will keep gaining in value in relation to how the stock is moving.

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

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

Daily Options Trading Strategy (DOTS) – Updates List of Stocks Used – Current as of 9/6/16

Here is the current list of stocks used with the Daily Options Trading Strategy (DOTS) as of September 6, 2016:

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

Tier 2: BA, BWLD, TWTR, CMG, IBM, FDX, HD, C, FIT

Tier 3: EXPE, COST, SQ, PYPL, DPZ, CRM, DIS, UPS, ULTA

Tier 4: PNRA, PII, INTU, GPRO, FFIV, PX, V, NUGT, AVGO

I separate each group of stocks used into groups of 9, using a grid view. This makes it easier to navigate different tabs and follow each stock without having to close out any tabs or leave any page.

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

Thanks.

A Look at Next Weeks Earnings Releases and Trading Opportunities (7/18/16 – 7/22/16)

Next week, July 18th – July 22nd, will be full of some very good earnings trades. Here is a list of the stocks I will be looking to trade .

NFLX, VMW, YOO, ISRG, LMT, MSFT, UNH, AXP, EBAY, FFIV, IMAX, INTC, LVS, MAT, PII, QCOM, TSCO, URI, AMD, ATHN, SAM, COF, DHI, DPZ, DNKN, FLEX, GM, P, PYPL, SBUX, SYK, HON, VFC

As earnings season kicks into full gear next week there should be at least a few weeks with a lot of activity. When trading earnings releases, I use neutral-based strategies such as the Reverse Iron Condor, the Neutral Calendar Spread, the Double Neutral Calendar Spread, and the Straddle/Strangle.

If you have any questions about these strategies, stock options, or the subscription plans, you can e-mail me at: kmob79@gmail.com

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: 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.

Daily Options Trading Strategy (DOTS) – Busy Week So Far (4/18/16 – 4/22/16)

There have already been six (6) trades placed and closed out today using the Daily Options Trading Strategy (DOTS), along with a good day trading yesterday. You can see the trade log here http://kevinmobrien.com/?page_id=480, where I post my trades daily and those in the Skype and Chatzy chatroom in real-time, providing in advance of each trade the ticker symbol, strike price, expiration, and my sell-to-close price above the price paid per contract.

I am on both Skype and Chatzy (Chatzy is great for mobile devices, so use this as a supplement for trader’s on the go) from 8:00 am EST until the markets close each day. Along with the trades posted in real-time daily, I also answer questions throughout the day. I am offering a reduced subscription rate for all plans until next Monday, 4/25/16. Each subscription also includes access to my Trading Forum, at http://kevinmobrien.com/?page_id=127, where I post weekly, earnings, and long-term trades.

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

Thanks,

-K

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