Quick Take: Bullish – Earnings Trade
Time Frame: Three To Ten Days.
Underlying Stock: Bullis Market Edge Opinion – No Position.
Desired Stock Price Direction: Up.
Option Position: Short Expiring ATM Call – Long Differed ATM Call (Credit Spread) & Short Expiring ATM +3 Call.
Desired Result: The stock performs as anticipated. The short expiring ATM +3 call expires worthless and the long deferred call gains additional premium.
Maximum Risk: Initial Call Spread Debit.
Quick Take: Bearish- Earnings Trade
Time Frame: Three To Ten Days.
Underlying Stock: Bearish Market Edge Opinion – No Position.
Desired Stock Price Direction: Down.
Option Position: Short Expiring ATM Put – Long Deferred ATM -3 Put (Credit Spread) & Short Deferred ATM -2 Put.
Desired Result: The stock performs as anticipated. The short expiring ATM -3 put spread expires worthless and the long deferred put gains additional premium.
Maximum Risk: Initial Put Spread Debit.
This Week’s Earnings Trades
| Market Posture: | Bearish | VIX–> | 20.02 | Neutral | |||||
| Directional Horizontal Earnings Trade | |||||||||
| Market | Open | Long One | Short One | ||||||
| Open | Edge | Stock | ATM | ATM +2, +3 | Open | Max | |||
| Stock | B-A | Date | Opinion | Price | ATM | Differed Call | Expiring Call | Debit | Risk |
| NONE | 10/24/18 | Bullish | |||||||
| Market | Open | Long One | Short One | ||||||
| Open | Edge | Stock | ATM | ATM -2, -3 | Open | Max | |||
| Stock | B-A | Date | Opinion | Price | ATM | Differed Put | Expiring Put | Debit | Risk |
| MSFT | B | 10/24/18 | Bearish | $104.30 | 104.0 | 108.0 | 101.0 | $4.03 | $4.03 |
Results For This Week’s Earnings Trades
| Open | Close | Profit/Loss | ||||||
| Close | ME | Stock | Stock | Open | Close | Per | Weekly | |
| Stock | Date | Opinion | Price | Price | Debit | Debit | Spread | P/L |
| MCD | 10/23/18 | Bullish | $167.32 | $177.15 | $6.97 | $10.10 | $313.00 | 313.00 |
| $0.00 | 313.00 | |||||||
| Open | Close | Profit/Loss | ||||||
| Close | ME | Stock | Stock | Open | Close | Per | Weekly | |
| Stock | Date | Opinion | Price | Price | Debit | Credit | Spread | P/L |
| CAT | 10/23/18 | Bearish | $130.55 | $117.42 | $3.00 | $5.04 | $204.00 | 204.00 |
| MSFT | 10/24/18 | Bearish | $104.30 | $108.36 | $4.03 | $2.18 | -$185.00 | 19.00 |
| Profit/Loss Bullish Spreads: | $313.00 | |||||||
| Profit/Loss Bearish Spreads: | $19.00 | |||||||
| Total Profit/Loss: | $332.00 | |||||||
| Total Risk Capital: | $20,000 | |||||||
| Weekly % Return: | 1.7% | |||||||
| Annualized % ROI: | 86.3% | |||||||
| Average | Average | % | Annualized | # Of | ||||
| Win % | Loss % | P/L | ROI | Trades | ||||
| 66.0% | 33.0% | 1.7% | 86.3% | 3 | ||||