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
| Directional Horizontal Earnings Trades | ||||||||||
| Bullish | Market | Open | Earnings | Short One | Long One | |||||
| Open | Edge | Stock | Release | Report | ATM +2, +3 | ITM | Open | 50% | Max | |
| Stock | Date | Opinion | Price | B-A Market | Date | Expiring Call | Differed Call | Debit | Target | Risk |
| UAL | 04/16/19 | Bullish | $85.01 | After | 04/16/19 | 87.0 | 83.0 | $2.37 | $3.56 | $2.37 |
| Bearish | Market | Open | Earnings | Short One | Long One | |||||
| Open | Edge | Stock | Release | Report | ATM -2, -3 | ITM | Open | 50% | Max | |
| Stock | Date | Opinion | Price | B-A Market | Date | Expiring Put | Differed Put | Debit | Target | Risk |
| JNJ | 04/15/19 | Bearish | $136.70 | Before | 04/16/19 | 134.0 | 136.0 | $0.90 | $1.35 | $0.90 |
| $0.00 | $0.00 | $0.00 | ||||||||
Results for this week’s trades will be posted over the weekend on the Scoreboard.