Earnings preview

I have several existing positions that have Earnings AMC:

  • $BWLD (Submarine Basket)
  • $PNRA (Submarine Basket)
  • $GILD (own for some clients)
  • $IACI (Swing account)
  • $ESRX (IRA account)

Here is an EPS graph on $BWLD via Estimize:

BWLD

Note: You can view the specific trade info on the appropriate Positions tab.

– DM 10:20 AM CST

Look Both Ways

Sometimes I see a chart that clearly shows the potential to make a move in either direction. I noticed this potential in $BWLD today with the 2 Gap Fill areas:

BWLD_C

So, how about a trade idea? This is one approach to consider:

  • Long the September 175/140 Strangle
  • Short the December 175/140 Strangle
  • This is called a Strangle Swap
  • Cost: $7.70 credit (that’s right, get paid)
  • Pro: protected until September expiry on any sudden UP or DOWN move beyond the chosen strikes
  • Con: takes margin

Some scenarios to consider:

1)  Price is $185 at September expiration. The long Sep $140 Puts go poof. Take the stock at $175. Now plan for adjusting the short December $175 Calls any time before the December expiration. If the short December $140 Puts are real cheap, BtC

2)  Price is $135 at September expiration. The long Sep $175 Calls go poof. Take the stock short at $140. Now plan for adjusting the short December $140 Puts any time before the December expiration. If the short December $175 Calls are real cheap, BtC. Might want to consider buying Calls to protect the short stock too, use some of the credit

– DM 1:00 PM CST

 

An Earnings trade idea in Buffalo Wild Wings

I will be considering the following trade for Earnings 10/27/2014 AMC in $BWLD:

BWLD_Earnings_trade

The trade idea:

  • Long November 135/125/120 1×2 Split Put Ratio with Short 150 Calls
  • Another way to look at the trade is noted in the chart above (Long Put Spread, Short Strangle)
  • This trade will be for credit
  • This trade takes margin (until the Short Strangle Option pieces are closed)

If price moves near the $150 or $120 levels you would need to consider hedging with stock in after hours.

 

Buffalo in the Wild

During the course of the day yesterday, I had a short list of stocks that I was monitoring very closely for a good long entry. One of the stocks was BWLD (Buffalo Wild Wings). I typically create a variety of charts when I am stalking, and here are a few updated Area charts that I use:

Here are just a few examples of what TA folks would potentially draw on a chart. As I have noted before, I feel this effort is important so that I understand as many perspectives as possible.

Remember, it’s war out there so you need to know what your enemies are thinking. 😉