Follow-up on a Trade Idea for Priceline Group

Here was my message on 2/18 via Social Media regarding a Trade Idea for $PCLN Earnings:

PCLN

Here is a closer look at the Daily chart I noted yesterday:

PCLN

A breakdown of the Trade:

  • Long the February 1160/1200 Call Spread
  • Short the February 1200/1050 Strangle
  • This trade could have been done for EVEN
  • This trade takes margin (until the Short Strangle pieces are closed)

With price hovering near the $1210 level today, lets’ take a look at how the Options look:

  • $1160 Calls:  $54.25
  • $1200 Calls:  $15.02
  • $1050 Puts:   $.05

If you don’t want to wait for Friday expiry you can take the trade off near a $25.00 credit.

 

- DM 11:50 AM CST

 

American Express

American Express has pulled back to a key Support area but still has some sentiment issues it seems (recent news of the Costco partnership ending doesn’t help). Here is a PnF chart on $AXP that shows just how important the current price level is:

AXP_PnF

- DM 10:40 AM CST

 

Nike Earnings plan

I frequently plan for – and execute – trades that are designed to take advantage of a big price move at Earnings (the “catalyst”). Although most of the time I do trades near the event – prior day or day of – there are times where I want to plan for a run-up into Earnings. Here’s why:

1) Options are cheaper weeks before the event (IT has not ramped yet)

2) If you do get an UP move in price – and have a Bullish biased trade on – you get the benefit of price appreciation AND IV inflating

I have elected to take this approach with Nike as it reports on March 26. I will be using March 27 weekly Options:

NKE_B

 

Part of my preparation process is to look at available consensus data for EPS. I use Estimize as one such data-set:

 

NKE

The EPS graph above is a perspective that I use (I added the Asc Triangle myself) to help determine if there are any patterns. Next I review a Daily chart:

 

NKE_D

Now on to a few Trade Ideas:

Long the March 27 weekly 92/95/85 Risk Reversal Call Spread (RRCS). This trade should cost a $.25 debit. This trade takes margin (until the Short Puts are closed at least)

Long the March 27 weekly 92/95/97 Lopsided Call Fly. Wait to Short the Puts until you have a more solid floor (and I would likely use a nearer dated expiration too). This trade should cost a $.75 debit for the initial Call Fly

 

 

 – DM 12:35 PM CST

 

Achillion Pharma trade update

Sometimes a trade looks ok – and then sometimes they suddenly don’t. For my $!@rr##*Ts## position this week I bring you $ACHN:

ACHN_B

I have had a March 14/18 CS in the IRA for a while (Long $14 Calls since 1/14, added Short $18 Calls on 1/27 to make the CS). I am using Options so that I can participate in a move but in a way where the Risk is well-defined.
Well, I may have gotten too complacent by letting it fade all the way down to near $10 now.

Time to reassess now.

Now on the bright side, I do have $2.85 in booked gains on a Stock trade. There is an Options Net of $1.75 too. My luck the CS will expire and then they’ll get bought out in April lol.

 

- DM 10:30 AM CST