Quick Take: Bullish – Earnings Trade
Time Frame: Three To Ten Days.
Underlying Stock: Bullish Market Edge Opinion – No Stock Position.
Desired Stock Price Direction: Up.
Option Position: Short Expiring ATM +2 Call – Long Deferred ATM Call (Credit Spread).
Maximum Risk: Initial Call Spread Debit.
Summary: The stock performs as anticipated. The short expiring ATM +2 call expires worthless and the long ITM deferred call gains additional premium.
Quick Take: Bearish– Earnings Trade
Time Frame: Three To Ten Days.
Underlying Stock: Bearish Market Edge Opinion – No Stock Position.
Desired Stock Price Direction: Down.
Option Position: Short Expiring ATM -2 Put – Long Deferred ATM Put (Credit Spread).
Maximum Risk: Initial Put Spread Debit.
Summary: The stock performs as anticipated. The short expiring ATM -2 put expires worthless and the long ITM deferred put gains additional premium.
This Week’s Earnings Trades
| Market Posture: | Bullish | ||||||||
| Directional Horizontal Earnings Trade | |||||||||
| Market | Open | Long One | Short One | ||||||
| Open | Edge | Stock | Report | ITM | ATM +2, +3 | Open | Max | ||
| Stock | Date | Opinion | Price | B-A | Date | Differed Call | Expiring Call | Debit | Risk |
| UNH | 01/14/19 | Bullish | $248.51 | B | 01/15/19 | 242.5 | 252.5 | $6.54 | $6.54 |
| GS | 01/15/19 | Bullish | $178.47 | B | 01/16/19 | 175.0 | 182.5 | $4.50 | $4.50 |
| Market | Open | Long One | Short One | ||||||
| Open | Edge | Stock | Report | ITM | ATM -2, -3 | Open | Max | ||
| Stock | Date | Opinion | Price | B-A | Date | Differed Put | Expiring Put | Debit | Risk |
| NONE | 01/14/19 | Bearish | $0.00 | 0.0 | 0.0 | $0.00 | $0.00 | ||
Results for this week’s trades will be posted over the weekend on the Scoreboard.