Here is a quick recap of trades that we initiated, closed, or debated in the week that was July 27th – July 31st:
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Monday July 27th:
New Trade – $JOY Division
Trade: JOY ($26.10) Buy Oct 26 call for $1.95
Rationale: This is a contrarian play in a stock with horrible price action and sentiment. Going out to October gives us some time, even if our entry is off slightly and even though vol is elevated options seem dollar cheap compared to how the stock is actually trading. If we do get a reversal soon we’d look to spread the calls or even close them is the snap back is big enough.
Read Original Post here
Name That Trade(s) – $F: Live Transmission
We took a look at the trade set up prior to Q2 earnings.
Read Original Post here
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Tuesday July 28th:
Twitter (TWTR) Earnings Preview & Trade Ideas
We took a look at the trade set up prior to Q2 earnings and concluded:
I am a lot less optimistic in the near term about the company’s prospects than I was a few months ago. My guess is that there are few CEO candidates that investors will be excited about, especially internal candidates. I would also guess that the changes that need to be made to accelerate user growth, engagement and monetization will take quarters not weeks/months.
Read Original Post here
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Wednesday July 29th:
Name That Trade $FB: Try now we can only lose
We took a look at the trade set up prior to Q2 earnings and concluded:
In bull market terms, Facebook’s 35% expected revenue growth has resulted in investors tripping over each-other to buy the stock. In my opinion, shares of FB are priced for perfection, which could be dangerous for those investors new to the stock as the company in the past has shown little regard for Wall Street’s dislike of reckless spending. With the stock just $5 away from the nice round number of $100, I assume it wont take much to get there, especially when you consider the favorable trends in display ads that were evident in Google and Yahoo’s results reported in the last couple weeks.
Read Original Post here
Name That Trade – $WYNN’s become a funeral pyre
We took a look at the trade set up prior to Q2 earnings and concluded:
The stock continues to be a tough press on the short side, but the path of least resistance seems to be down. At some point there will be an inflection point, where the news flow is not as bad as sentiment and the price action in the stock, but for now the fundamentals appear challenged with no end in sight to the weakness in China.
Read Original Post here
Name That Trade – $WFM: Come on baby, light my fire
We took a look at the trade set up prior to Q2 earnings and highlighted some short dated out of the money call buying that took price prior to the results.
Read Original Post here
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Thursday July 30th:
Trade Update – $PG: Closing July Weekly Puts for a Gain
Action: Sold to close the PG ($78.40) July 31st weekly 81 put at $2.60 for a $1 profit
With the stock down a few % following disappointing earnings and guidance we took the profit in the weekly puts.
Read Original Post here
Name That Trade $LNKD: Is You In or Is You Out?
We took a look at the trade set up prior to Q2 earnings and offered a couple ways to play for a pullback to $200, in line with the implied earnings move, and one trade that targeted the implied move to the upside.
Read Original Post here
New Trade $XOM: This One’s For Cecil
Trade: XOM ($83) Buy to open 1 July 31st 83 put for 82 cents
We took a look at the trade set up prior to Q2 earnings and concluded:
Rationale: Options prices just seem to cheap, and the bounce off of the lows of the week provide a good short term entry.
Read Original Post here
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Friday July 31st:
Trade Update $XOM: Closing July Weekly Puts
Action: Sell to Close XOM ($80) July 31st weekly put at $3 for a $2.18 gain
XOM did miss, guide lower and cut their share buyback for the current quarter causing the stock to give back all of the gains off of Tuesday’s lows. Options prices were TOO cheap in hindsight, and the price action once again matches the fundamentals as the stock again approaches new 52 week lows.
Read Original Post here
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Expired Worthless:
New Trade – $CMG: Narrowly Avoiding Complete Carnitage
Trade: $CMG ($725) Buy to open July 31st 725/700/675 Put Fly for $6
The stock barely saw a downtick since putting this trade on following their massive earnings gap. CMG is back on our “banned list”.
Read Original Trade fro July 22nd here