Apple earnings review

AAPL

The above graphic is via Estimize and is the EPS information they provide (I added the Red lines however). It appears that the consensus on Estimize is near $2.25 for EPS as it heads into Earnings AMC today (4/27).

Now for some Option information for $AAPL:

AAPL_cboe AAPL_nasdaq

Sure looks like the skew is to the Call side. One FA note: cash for Apple should get to $200 Billion late this year or early next year. Let that sink in …

Now for a quick look at the Daily chart:

AAPL_E

 

- DM 10:45 AM CST

 

Earnings Trades update

Centene $CNC  I remain Long stock at $56 (since 2/4) and Short The September $67.5 Calls (covered calls, need to adjust up/out soon). No change this week

Twitter $TWTR  I remain Long stock at $41.99 (since 2/5) and Short the June $45 Calls (covered calls, need to adjust up/out soon). No change this week

Celanese $CE  I am Long stock at $60 (since 4/17) and own the May 70/65/60 Collar PS. No change this week

Royal Caribbean $RCL  I am Short the May 75/70 Strangle. The Long $70 Calls have already been closed. I have Buy/Sell Short Stops set at 74/71 respectively. New

VMware $VMW  I am Long the May/July 90/95 Diagonal Call Calendar. The Short $79 Puts have already been closed New

Thermo Fisher Scientific $TMO  I am Long the May 135/140/145 Call Fly with Short $125 Puts. New

O’Reilly Automotive $ORLY  I am Long the May 200/230/240 Call Fly. The Short $200 Puts have already been closed. New

Edwards Lifesciences $EW  I am Long the May 140/145/150/155 Call Fly. The Short $130 Puts have already been closed. New

 

- DM 10:45 AM CST

 

 

Position Updates

A quiet week for me in the regular accounts – the focus continues to be on Earnings trades (both pre & post the event). There are 7 newly added positions this week to survive to the weekend:

Jack $JACK  I am Long the May 95/100/105 Call Fly with Short $85 Puts

United Rentals $URI  I own the May 95/98/91 RRCS

Earnings:  $RCL $VMW $TMO $ORLY $EW

Exits:

Here is the Summary:

04252015

- DM 10:30 AM CST

Options Expiration – April 24 weekly

Intuitive Surgical $ISRG  I own the 540/530/505 Bear Risk Reversal PS (this was a Collar PS to protect Long stock which hit a Stop on 4/22)

Qualcomm $QCOM  I am Short the 72/66 Strangle

Skyworks Solutions $SWKS  own the 95/88 1×2 Put Ratio (protects Long stock)

Western Digital $WDC  I am Long stock at $92 with a 97/96/93 Collar PS

iShares Brazil $EWZ  I am Long the ETF at $32.15 with Short $34 Calls (covered calls)

Express Scripts $ESRX  I am Long at $85 with Short $88.5 Calls (covered calls)

American Express $AXP  own the 77/75 1×2 Put Ratio

Caterpillar $CAT  I am Long a 82/79 PS (left over part of a Collar PS)

Monsanto $MON  I am Long at $113.4 with Short $117 Calls (covered calls)

Boeing $BA  I am short the 157.5/149 Strangle (left over from Earnings trade)

International Business $IBM  I am Long stock at $168 (hedge) with a 165/170 1×2 Call Ratio (Earnings)

Ebay $EBAY  I am Long the $56.5 Calls and Short stock at $59.5 (hedge)

Facebook $FB  I am Short the 88/80 Strangle (left over from Earnings trade)

 

- DM 6:00 PM CST

 

The Put Ratio – a variety of uses

If you don’t currently trade Options that is fine – you may find this subject peeks your interest as I discuss the Put Ratio.

During my weekend review I noticed that several of my positions had Put Ratios that were drifting ITM (into the money) or very near it. Let me list a few positions here and then go over why I like this approach for protection:

Skyworks Solutions $SWKS  I am Long stock at $63 (since 11/18). The Option pieces: I am short the Jan 2016 $100 Calls (covered) and Long the April 24w 95/88 1×2 Put Ratio

Zillow $Z  I am Long stock at $82.96 (since 4/14). The Option pieces: I am short the May 08w $97 Calls (covered) and Long the 95/88/85 1×2 Split Put Ratio (L the $95 Puts, S the $88 & $85 Puts to create the ratio)

Avago Tech $AVGO  I am Long stock at $105 (since 11/26). The Option pieces: I am Short the July $125 Calls (covered) and Long the May 125/115 1×2 Put Ratio

If you do you homework to pick solid strikes, you can gain downside protection at a very low cost (does take margin however). I typically use a Stop on the stock if it gets anywhere near the middle range of the Put Ratio.

Another use of the Put Ratio

If you think there is more short-term weakness in the stock but see a level below where you own it – choose that level for the lower portion of the Put Ratio. For example:

If you think stock XYZ is going to $50 – and is currently trading at $54.00 then consider going Long the 52.5/50 1×2 Put Ratio. You can capture a move down thru $52.50 all the way to $50. B/E will be at $47.50 +/- what you pay/get for the trade.

 

- DM 1:00 PM CST

 

Chart review

Short to Intermediate Term:

A pullback Buy candidate
CAB_B
Back inside the Channel. A RSI Buy
EXPD_B
I like the Hammer on Friday, will look for confirmation on Monday
GS_C
Held Support & bounced. Back over this Rising TL too (blue line) PII_E
Trying to breakout over this Rising TL WBC_C

I would sell $40 Puts XPO_C

Breakout watch ZLTQ_B

Long-term:

Bottoming setup
DBC_B
Bottoming setup XME_B
Bottoming setup DBA_C

- DM 10:45 AM CST

 

Position Updates – full report

I did a brief Position Updates post on Friday. This is the normal weekend post I do each week.

Exits this week:

Submarine Basket:

04182015

Here is the Summary for the Swing, LT, IRA accounts:

Positions_04182015

- DM 11:15 AM CST

 

Position Updates

This is a list of the positions that look to survive to the weekend:

Earnings:  $CNC $TWTR $CE (new)

Swing Acct:  $FLTX $ISRG $QCOM $SWKS $UNP $WDC $Z (new)

Long-Term Acct:  $AVGO $EA $IWC $QLYS $RMD $WBA

IRA Acct:  $CYBR $EWZ $ESRX $JCI (new) $MAR

Submarine Basket:  $AXP (new) $BWA $CAT $EXPE $MON $PNRA $RL $SNDK $WYNN

Fab 5:  $ENDP $LB $WYN (so 2 empty seats to fill)

50/50 Basket:  no positions

 

- DM 1:00 PM CST