Earnings Trades update

I did an update on 1/28 & this is how things look into the weekend:

$SLB

$NFLX

$PII

$QRVO  I am Short the February $70 Puts still

$BABA  I am Long stock at $90.15 (1/2 size) and Short the February 06w $90 Straddle (1/2 size each, Calls are covered). Options Net: $6.08

$GOOGL  I took stock at $507.50 and I am Short the June $535 Calls (covered). Options Net: $1.07 & stock gain of $31.70 is booked (from the initial hedge in A/H)

$N  I am Long stock at $93.88

Exits:

 

- DM 7:30 AM CST

 

The Fab 5 update

I came into this week with 2 empty seats to fill but found no new trades to initiate. I closed the $AET position and had a Stop hit on the Long stock piece for $UNH (not an official position for the Fab 5 but the trade is still on). The Short March $105 Calls for $UNH remain with a Buy Stop set at $109.50 for now.

I am back to 3 empty seats to fill.

Here is the Summary:

01312015

Fab 5 Candidates:
$HYG
$VAR
$MPC

 

- DM 7:30 AM CST

 

Position Updates

My focus for new trades continues to be on Earnings trades so there is limited activity in the normal Swing, Long-term, or IRA accounts. I did close $INCY & $VRTX in the Swing account this week. The only material changes in the LT or IRA accounts:

  • $MAT  I am Short the February 28/25 Strangle with a Buy Stop set at $27.90
  • $URI  The Sell Short Stop (SSS) did trigger on 1/30 (this is a hedge)
  • $EA  I adjusted the Short Calls up/out post-Earnings
  • $ACHN  I created a March 14/18 CS (was already Long the $14 Calls)

50/50 Basket: no positions

Submarine Basket:

Earnings:

Here is the Summary:

Positions_01312015

 

 

Now What?

For the “Now What?” setup this week I bring you Marathon Petroleum Corp. Let’s get right to the Daily chart:

MPC

RSI Buyers have been showing up consistently on the RSI 30 test but now the question has to be answered: do you look for the Breakout trade or does it have another down leg?

 

- DM Noon CST

 

Trading Activity

Amazon $AMZN  I initiated a Long January 30 weekly $305 Straddle for Earnings yesterday. This morning I have StC the $305 Calls for a $43.18 credit. The Long $305 Puts will go poof. Options Net final: $20.18

Google $GOOGL  I initiated a Long January 30 weekly $507.5 Straddle for Earnings yesterday. In After Hours yesterday I traded stock (as a hedge) for a $31.70 gain. The Option pieces still remain. Options Net is still: -$21.00

 

 

StC = Sell to Close
CS = Call Spread

- DM 9:30 AM CST

 

Trading Activity

Remain focused on Earnings Trade opportunities.

Activity today:

Qorvo $QRVO  I initiated a new Long stock position at $71.70 in P/M (post-Earnings). I have since sold the stock and did a new trade: Long the February 75/80/70 RRCS. Options Net: -$.15 & stock gains of $2.85

Alibaba $BABA  I initiated a new Long stock position at $90.15 in P/M (1/2 size, post-Earnings). The next step was to StO the January 30 weekly $90 Straddle (1/2 size each, Calls are covered). Options Net: $3.86

 

RRCS = Risk Reversal Call Spread
StO = Sell to Open

 

- DM 10:00 AM CST

 

Tractor Supply – a look at an existing position into Earnings

I have had a position in $TSCO for the Submarine Basket since 09/25/2014. Here is the current position info:

TSCO

I received a few comments today about letting the Long stock position stay “capped” into Earnings. If you review the chart above, you can see that my priority should be to protect the recent gains. It has had quite an UP move from the October lows so it is my view that the risk may be to the downside now.

If I am wrong? No harm no foul. I can sell premium in a future expiration to buy back the Short $80 Calls at February expiration. The Put Ratio would go poof.

Worth noting: I have an Options Net of $1.10 & accumulated booked stock gains of $7.07 up to this point.

 

- DM Noon CST