A trade idea in Acuity Brands

Acuity Brands reported Earnings on 07/01 and missed estimates:

Estimize Earnings page for $AYI

The reaction was negative as traders took profits or shorted the report. Here are a few looks at the Daily:

AYI AYI_B

As you can see above, price is hanging on to the 200 SMA right now (one Support level).

So what now? If you don’t currently have a trade, here is one idea to consider (if you think it will start a steady rebound into August):

  • Short the July 120/115 Strangle (takes margin)
  • Long the August 120/125 Call Spread
  • This trade can be done for a small credit
  • The margin use will go poof if price is in between the 2 July strikes at expiration

If the $120 level is too close for you then consider this:

  • Short the July 125/115 Strangle (takes margin but will be less than idea #1)
  • Long the August 125 Calls
  • This trade can be done for a small credit
  • The margin use will go poof if price is in between the 2 July strikes at expiration
  • 1nvestor

    Since $AYI has been unable to gain momentum yet here is an adjustment step for this trade if you took either one: BtC the July 115 Puts & StO August Puts by Friday (should be done for better than free, likely a credit.