Chicago Bridge & Iron

part of the Big Footprints series of blog posts

I often state that Option flow is an increasing important data point in a trade decision – whether you actually trade Options or not. I see continued growth in what I call “big footprints” in the Option Chains daily and thought I would highlight $CBI this week.

Here is a Daily chart:

CBI_B

A Channel has formed over the past few weeks. Now on to a big footprint that someone left in the August option chain:

CBI_Aug_Options

One additional comment on this: I realize that there will be a variety of reasons for an unusual Volume day at a particular strike and/or chain. It could be someone rolling up, it could be a hedge, etc. My point here is to simply show that regardless of the reason – it is a big footprint.

Earnings Trades update

We have officially kicked off the new Quarter Earnings season so I expect to see my focus continue to increase in this area of my trading. I was light this week on new trades but will end the week with new positions (left over short July pieces) in $PSMT & $TCS.

Here is the Summary:

07122014

 

Position Updates

I did an update earlier this week summarizing the trading activity this week here and all the newly added positions survived to the weekend (exception is $LL but I already noted that it was exited).

Submarine Basket:

Earnings:

50/50 Basket update was done on the blog Thursday. No material changes on Friday.

Here is the Summary:

Positions_07122014

 

50/50 Basket update

I have been quite active this week in the 50/50 Basket as most of the positions are seeing continued down movement. I took a Stop in $USU for a nice gain but was able to initiate a new short so it is back in the basket. There was only 1 hit on the scan today: $JNUG.

Here is the Summary:

07102014

Position Updates

Just a quick review of newly added positions this week along with some exits on new & existing positions:

  • $TSCO Submarine Basket, beat up on guidance
  • $GDP Swing, weakness; a new short on 7/7
  • $GGAL Swing, Argentina; a new long on 7/8
  • $LL Short-term, smashed on prelim guidance in A/H (had already been short during the day) exited
  • $PAM Swing, Argentina; a new long on 7/7
  • $PCAR Swing, VW rumors; a new short on 7/7; added July Bear Collar
  • $TRW Swing, $100 Roll candidate; unusual Call buying noted so tagged along on 7/10 (July 90)

Exits:

 

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

Position Updates

Noted activity in the my personal accounts

Although this was a holiday shortened week, I was fairly active in the Swing account. Here are the newly added positions this week that survived to the weekend:

  • $ILMN   L July 175/185/170 Risk Reversal Call Spread
  • $VIPS   L August 200/220 Call Spread (LT account)

Exits:

Submarine Basket:

Earnings:

Here is the Summary:

Positions_07042014