General Options Blog

7-17-2012 Watchlist – FB, LNKD, CMG, WYNN

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Yesterday was a setup day for the week ahead. CMG WYNN and LNKD we on the watch list yesterday. Lets see how they play out this week. LNKD faded after the opening pop. WYNN and CMG held strong.

 

Seems like the ANALysts use the watch list as part of their research as both CMG and WYNN were upgraded this morning.

Still like WYNN for earnings, but doesn’t mean bet the farm. $105 weekly calls were reasonably priced at the open yesterday at .52/.55./60 throughout the morning. Figure WYNN may move 10%+ on a rosy forecast, so those 105 calls could be a 5-10 bagger come wednesday.

CMG calls are pricey so going way out of the money before the earnings thursday AH’s could prove to be a good bet. $450 calls or so IMHO.

BIG BEN bernacke will be all over CNBC today and tomorrow so expect continued expectations around some QE3 talks.

Stocks on watch today:

LNKD – still think she tests and breaks $110 sometime this week. Playing with 110 calls so far.

BLK- may look to get in on earnings. Like BLK down here, will post strikes in chat.

FB – Huge volume PM, may look for 30 calls at open.

CMG – out of the money calls for premium build – $440/450s

 

Thats all for now. I will be in audio most of the morning. Then after hours we pray for WYNN to PAY! ~

 

- Jimmybob

Earnings Central – Wynn Resorts (WYNN)

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Earnings season for option traders can be akin to gambling, and there is no better way to start the season off then with Wynn Resorts, LTD (WYNN) a developer, owner and operator of destination casino resorts. We have wrote about Wynn Resorts, LTD (WYNN) many times in the past with quite a bit of success. Read about it here and here. We are now ready to ride Wynn Resorts, LTD (WYNN) for some potential profits on it's earnings report.

Retail traders are always the last to know about a companies performance, and the chart tells the story for Wynn Resorts, LTD (WYNN). Weaker results in Vegas coupled with possible slowdowns with it's Macau unit have propelled the stock into oversold territory. It was only a few months ago when Wynn Resorts, LTD (WYNN) was breaking over $130 on strong volume. Those days are a distant memory as Wynn Resorts, LTD (WYNN) closed at 96.44 today after falling faster then the value of the Peso in the '90s.

When there is blood on the streets, we see green. Any upward guidance or rosy forecast coming from Wynn Resorts, LTD (WYNN) during it's earnings report after hours on Tuesday will result in a potential 10-15%+ spike in the stocks share price. Positioning ahead of that possible move can result in some rather large returns.

We mentioned 105 calls in chat, and will look to grab some more sometime during the day on Tuesday. Lets hope Wynn Resorts, LTD (WYNN) kicks off earnings in style. No need to go all in, but lets at least get some blackjack!

Disclosure: We hold a boatload of the 105 July weekly calls purchased at .52/.55/.62.

 

July 16th, 2012 – Watchlist : LNKD, CMG, PRX, EBAY, YHOO, GS, BLK

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After a huge rally on friday, it is not surprising to wake up to red futures. Earnings seasons starts to kick into full gear this week, and should bring some excitement to some rather dull weeks.

 

Some interesting news this morning on a stock i have followed for years PRX with a buyout offer of $50. Have to find a post i made about that one, but always though it was undervalued. Good thing about the deal, is they can pursue a better offer until Aug 25th, meaning someone may come and sweeten the deal.  Good idea would have been buying some leap calls.

Anyway onto the watch list:

WYNN – reports AHs tomorrow. The stock has taken a beaten on weakening vegas numbers as well as possible issues abroad. I have a feeling she beats nicely after last Qs hiccup. Will look for some $110/$115 strikes for the ramp. If she misses, stock will see $80-85, so could be a nice play either way.

LNKD – Bollie are tight on the chart, and i think the stock is ready to finally break and hold $110. Thought the test would happen friday, but i was wrong. Think it happens today or tomorrow. Will look for $115 calls sometime today : http://stockcharts.com/c-sc/sc?s=LNKD&p=D&b=9&g=0&i=p71833622492&a=255600933&r=1342443536796

CMG – think the story is not over with this one, at least not yet. I actually like BWLD as the next growth story, but think CMG has one or two last laughs in her. Earnings not till Thursday AH’s, but will look for some calls for a premium build and hopefully sell them before the close thursday. Will post more in chat,  but may go for the $430 calls @ $1 and hopefully feel for 50%+ the week.

 

Many other stocks on watch this week for potential plays: GS, BLK, YHOO, EBAY, GOOG …

Will have an earnings central post late tonight with strikes and opinions on some of the earning plays!

GOOG Earnings? Where Will GOOG Trade The Day After Earnings?

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GOOG is generally one of the more highly anticipated earnings reports of the season.  Why?  For an options trader GOOG has offered some fairly strong returns for those positioned properly before earnings in the past.  Back on April 17th 2008 GOOG blew away estimates and the next day the stock rose over 20%.

GOOG moved almost $100 higher that day and call holders hit paydirt.  The $490 strike that was selling for $.50  hit $57 the next day.  $500 into $57,000  in less than a full trading day!  Will GOOG post a move like that again this earnings season?

I have charted GOOG's earnings moves the last 6 years.

Four of the last 5 July's has seen GOOG decline the day after reporting earnings, however last JULY GOOG surged some 13% post earnings.  A new trend perhaps?

I highlighted a few trades in my Live earnings presentation tonight.  With GOOG one strategy is to trade it the day of earnings and not ride through earnings.  Last quarter buying puts the day after earnings was a big money maker.  I'm sure we will see another big move for GOOG in the range of 5-7% and I am leaning toward the calls.

Three Out of Five Ain’t Bad

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A Baseball player need only get a hit once every 3 at bats to be called a great hitter.  If a basketball player hits 50% of his shots hes doing better than almost all of his peers.  A weatherman need never be right he can just blame his forecast on the weather.  How about an out of the money options trader?

I wasn't having the best of weeks heading into the trading day yesterday.  I sat on my hands as we gapped lower and continued to sink.  I saw a few opportunities and started to get into some positions.  I bought LVS $40 calls for $.29,  I ended up exited at $.19 for a loss, I then bought the GDX $41.50 calls at $.12.  I alerted these trades in the chat room in real time.  The GDX calls I was able to get at the low of the day.  GDX rallied from that point on and I sold half at $.70.  I was able to sell the rest today at $.80.  That's $.12 into $.75.

After buying those GDX calls I looked for more opportunities.   With GDX recovering its losses I saw that FCX was lagging.  I opened up $32 FCX calls for $.29.  Once again I alerted this in the chat room in real time.  I was able to sell half those FCX calls yesterday and the rest today for a tidy profit.  They hit $1.32 from my entry of $.29.

With the big China data coming last night I entered into some BIDU $110 calls for $.40.  I ended up selling for a loss today as BIDU couldn't must much of a rally.

Later on in the day I wanted to take a trade on JPM without actually buying JPM options.  I entered into the $95 GS calls at $.38, and again posted this trade in real time in the chat room within seconds of making the trade.  Those calls traded mostly flat the rest of the day yesterday, but today they soared hitting almost $3.00!

To recap I opened and posted 5 trades in the chat room yesterday and three of them surged several 100%.

GS $95 calls at $.38 hit $2.80  that's potentially $380 into $2,800 = +$2,420

BIDU $110 calls $.40 to $.28   that's potentially $400 into $280 =  -$120

LVS $40 calls  $.29 to $.19    that's potentially $290 into $190= $-100

FCX $32 calls at $.29 hit $1.32  that's potentially $290 into $1,320= +$1,030

GDX $41.50 calls at $.12 hit $.93  that's potentially $120 into $930= +$810

Potential profit:  $4,400

 

An options trader can be wrong and yet be more profitable than any other trader, while also putting less capital at risk.