Earnings season continues in earnest tonight with quarterly reports from AXP, EBAY, LRCX, RVBD, and WYNN scheduled for after the close. Earnings related options flow continues to dominate trading activity, but a few non-earnings related weekly options trades have piqued my interest heading into expiration Friday. Of note we’ve seen: 4k Oct 12 puts sold in biopharma company Pharmacyclics...
Apple is scheduled to report 4Q financial results today after the close. The Street is expecting EPS of $7.24 on revenue of $29.5 biliion. This will be the first post-Steve Jobs earnings report so all eyes will be squarely on Tim Cook and how he approaches providing key information to the financial community. Things to pay close attention on the conference call include: gross margin guidance...
I’m passing along an article from the Options Trading Signals guys responding to this very question. The OTS team has done a remarkable job in calling the market’s recent upward momentum so I’m paying close attention to the key points they make and implementing some of their ideas in my weekly options trading activities. Highlighted below is the beginning of the article,...
While screening for weekly options to sell today, one name that stuck out like a sore thumb was Southwestern Energy (SWN) as implied volatility in the options expiring next week is up some 13% and the company just announced earnings will be released on October 27, which falls after October expiration. Clearly something is going on in the name, why all the sudden upside call buying (28k vs. 3k...
Google (GOOG) is scheduled to report 3Q financial results today after the close. The Street is expecting EPS of $8.74 on revenue of $7.2 billion. Shares of GOOG have exhibited decent volatility around earnings releases averaging a +/-7.3% around its last 8 earnings reports with a high of 13% emanating from last quarter’s results (see chart below). Using yesterday’s closing prices,...
Our weekly options trading screens alerted us to an opportunity in First Solar (FSLR). Shares of FSLR have fallen over 40% in the last month and a half and all signs point towards continued weakness over the coming days. Around 11:15 we got long some deep in-the-money weekly puts to ride shares lower. When looking to initiate a deep in-the-money weekly option purchase we try to target options...
Calendar Q3 earnings season kicks off tomorrow with Alcoa (AA) scheduled to report earnings after the market close. With shares of AA trading around $10, the weekly options straddle could be purchased for $0.73, representing a ~7% move for the week.
Notable weekly options flow today includes buyers of over 3k Hewlett Packard (HPQ) Oct 26 calls for $0.58 and buyers of over 10k Oct 12 puts in...
Each Friday I look to sell weekly options set to expire the following Friday to take advantage of the rapid time-value decay (theta) of the weeklys heading into the weekend. Weekly options incur the greatest time value loss on the Friday before the weekend and on expiration Friday. Options market makers tend to adjust pricing throughout the 1st Friday afternoon to account for the weekend...
I’m frequently asked how do I go about selecting candidates for weekly options trades, and while the process does entail many steps, it all starts with utilizing the various trading tools provided by MarketClub.
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The use of covered call / buy-write strategies within an investment portfolio has been found to yield slightly greater returns with only two-thirds the volatility, making it one of the more popular portfolio risk management strategies. The traditional buy-write strategy involves purchasing an underlying asset (equity, ETF, Index, etc…) and simultaneously selling a call option on the...