May 21st, 2013
Today we placed the following orders in the PEA Picker portfolio at Terry’s Tips (this is the portfolio that has enjoyed eight consecutive gaining plays without a loss).
May 21, 2013 Trade Alert – PEA Picker Portfolio – LIMIT ORDER
I wrote a Seeking Alpha article about this play if you are interested – How To Play The Salesforce.com Earnings Annou…
In this article I suggested buying June options for the long side but I have since noticed that the July options are less than . . .
Tags: Calendar Spreads, Calls, CRM, diagonal spreads, Earnings Announcement, Earnings Option Strategy, Earnings Play, implied volatility, Monthly Options, Portfolio, Profit, profits, Puts, Risk, Salesforce, Terry's Tips, thinkorswim, Volatility
Posted in Earnings Announcement Options Strategy, Monthly Options, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options |
May 17th, 2013
Note: There is a lot of valuable information in this report for anyone who trades stock options. It will take you about 15 minutes to read, but that investment in your time could be worth thousands of dollars to you down the line. I hope you will read it thoroughly all the way to the end.
On April’s Fools Day in 2013, we opened a new $5000 portfolio at Terry’s Tips. We thought that might be a lucky day to start. For several months we had been studying what happens just before and after a company announces their quarterly earnings, and this portfolio was designed to put our observations to work.
The biggest thing we discovered in our analysis was that . . .
Tags: Auto-Trade, Calendar Spreads, Calls, diagonal spreads, Earnings Announcement, Earnings Option Strategy, Earnings Play, implied volatility, Monthly Options, Portfolio, Profit, profits, Puts, Risk, Straddles, Strangles, Terry's Tips, thinkorswim, Volatility, Weekly Options
Posted in Earnings Announcement Options Strategy, Monthly Options, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options |
May 13th, 2013
The Green Mountain Coffee Roasters (GMCR) spread I recommended last week resulted in a 20% gain. Not bad considering we were blindsided by their announcing a new 5-year deal with Starbucks that shot the stock 25% higher while we were betting on a lower post-announcement price. Our gain was not as great as last week’s 50% gain on Apple, but we will take 20% anytime (I’m sorry, but I executed the Apple spreads in a Terry’s Tips portfolio and did not share it with the free newsletter subscribers).
Tags: AAPL, Auto-Trade, Calendar Spreads, Calls, DE, Deere, diagonal spreads, Earnings Announcement, Earnings Option Strategy, Earnings Play, GMCR, implied volatility, Monthly Options, Portfolio, Profit, profits, Puts, SINA, Sina Corporation, Terry's Tips, thinkorswim, Volatility, Weekly Options
Posted in AAPL, Earnings Announcement Options Strategy, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options |
May 9th, 2013
Update on the Green Mountain Coffee Roasters (GMCR) Trade
On Monday, I wrote to my free newsletter subscribers and recommended the following trade in advance of the company’s earnings announcement after the close on Wednesday:
Buy To Open 10 GMCR Jun-13 52.5 calls (GMCR130622C52.5)
Sell To Open 10 GMCR May2-13 57 calls (GMCR130510C57) for a debit of $3.70 (buying a diagonal)
This spread would make a gain for the week if the stock managed to . . .
Tags: Calendar Spreads, Calls, diagonal spreads, Earnings Announcement, Earnings Option Strategy, Earnings Play, GMCR, implied volatility, intrinsic value, Portfolio, Profit, profits, Puts, Risk, Terry's Tips, thinkorswim, Volatility, Weekly Options
Posted in Earnings Announcement Options Strategy, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options |
May 6th, 2013
The spreads I suggested buying a week ago in advance of the Questor (QCOR) earnings announcement resulted in a gain of 13.6% for the week. We were correct in the direction the stock would take (higher) but we underestimated how much it would rise. We lost money on the calendar spread but made it back and more in the vertical spread we placed at the same time.
While we were disappointed with our return, 13.6% per week on an annualized basis works out to a pretty big number.
This week I am sharing what I believe is one of the best option investment possibilities I have seen in a very long time.
If you read down further, there is information on how you can become a Terry’s Tips Insider absolutely free!
Terry
How to Play the Green Mountain Coffee Roasters Earnings Announcement
For the three following reasons, I believe that Green Mountain Coffee Roasters (GMCR) will exceed expectations when
Tags: Calls, diagonal spreads, Earnings Announcement, Earnings Option Strategy, Earnings Play, GMCR, implied volatility, Portfolio, Profit, profits, Puts, Terry's Tips, thinkorswim, Volatility, Weekly Options
Posted in Earnings Announcement Options Strategy, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options |
April 29th, 2013
Last week I suggested that you “purchase May – Apr4 calendar spreads on AAPL at the 410 and 420 strikes, paying $3.85 and $3.75 for them in hopes that AAPL moves higher than its $390 price that it closed at Friday.” We did just that in a Terry’s Tips portfolio.
The stock did manage to move up and we sold these spreads early on Friday for $6.86 and $4.66. We sold early because we had such a good gain and because Fridays are usually weak for AAPL (people tend to sell Weekly call premium on that day and depress the stock price). A lower price would have resulted in a lower gain because all of our strikes were higher than the stock price. The stock managed to move up by $8 after we closed out the spreads, and we would have done considerably better if we had waited (but taking a sure profit is our preference, and we shouldn’t look back – it only hurts).
Our gain on the spreads worked out to be 50% after commissions. We will take that any week.
If you read down further, there is information on how you can become a Terry’s Tips Insider absolutely free!
Terry
A Possible Earnings Play for This Week
Tags: AAPL, Auto-Trade, Calendar Spreads, Calls, diagonal spreads, Earnings Announcement, Earnings Option Strategy, Earnings Play, implied volatility, Portfolio, Profit, profits, Puts, QCOR, Questor, Terry's Tips, thinkorswim, Volatility
Posted in Earnings Announcement Options Strategy, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options |
April 22nd, 2013
The SanDisk spread I recommended to buy last week generated a 68% gain after commissions in a Terry’s Tips portfolio. This week I have two other suggestions, one of which you must buy in the next hour or so after this is being sent out.
Also, if you read down further, there is information on how you can become a Terry’s Tips Insider absolutely free!
Terry
Expectations Trump Results
This week we got lots more support for our premise that expectations are more important than the actual results when a company announces earnings. Not only did we score big-time with a bearish bet on SanDisk but we saw that expectations were dreadfully low for Google and we bought calendar spreads at strike prices much higher than the pre-earnings stock price and more than doubled our investment on both of them.
Tags: Calendar Spreads, Calls, diagonal spreads, Earnings Announcement, Earnings Option Strategy, Earnings Play, implied volatility, Portfolio, profits, Puts, SNDK, Terry's Tips, thinkorswim, Volatility, Weekly Options
Posted in Earnings Announcement Options Strategy, Terry's Tips Portfolios, Weekly Options |
April 18th, 2013
Update on SanDisk (SNDK) Earnings-Related Option Play
Last week in a Seeking Alpha article – How To Play The First Week Of The April Earnings Season I showed how SNDK had excessive expectations going into its earnings announcement (whisper numbers exceeded analyst expectations by 18.7%, the stock had soared over the last week and month, and implied volatility of Weekly options was 50% higher than IV of the May options.
With the stock trading at $57.50, I recommended buying May-13 57.5 puts and selling Apr-13 55 puts. The natural price for this spread at Friday’s close was $1.63. Shortly after the open on Monday in an actual portfolio conducted at Terry’s Tips, we were able to buy this spread for $1.61 in our Earnings Expectation portfolio. We bought 15 spreads, shelling out $2452.50 including commissions.
The announcement exceeded earnings expectations and revenue grew 14%, but the excessive expectations drove the stock down to about $55 at the open on Thursday. We closed out our spread shortly after the open, collecting $2.77 per spread, or $4117.50 after commissions. Our gain for the trade amounted to $1665, or 68%.
It was a good week.
Tags: Calendar Spreads, diagonal spreads, Earnings Announcement, Earnings Option Strategy, Earnings Play, implied volatility, SNDK, Terry's Tips, thinkorswim, Volatility
Posted in Earnings Announcement Options Strategy, Monthly Options, Stock Options Strategies, Terry's Tips Portfolios |
April 15th, 2013
This week I will offer a simple spread idea that could make 50% in a couple of days next week. It will cost about $170 per spread to put on.
Also, if you read down further, there is information on how you can become a Terry’s Tips Insider absolutely free!
How to Use Expectations to Prosper With Earnings Announcements
The earnings season started just last week. In my last Idea of the Week I recommended buying a straddle on JPMorgan (JPM), the first big company to announce this time around. We made that trade in an actual portfolio for Terry’s Tips subscribers and closed it out for a 15%+ gain after commissions.
I also suggested an options strategy for JPM in a Seeking Alpha article – How To Play The JPMorgan Earnings Announcement. In another Terry’s Tips . . .
Tags: Calendar Spreads, Calls, Credit Spreads, diagonal spreads, Earnings Announcement, Earnings Option Strategy, Earnings Play, Earnings Season, implied volatility, JPM, Monthly Options, Portfolio, Profit, profits, Puts, SNDK, Straddles, Terry's Tips, thinkorswim, VIX, Volatility
Posted in Earnings Announcement Options Strategy, Monthly Options, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios |
April 1st, 2013
Most of the time I prefer to sell options with just a few days or weeks of remaining life and collect the premium that is decaying at a higher rate than ever before. However, this policy is not always the most profitable alternative out there. Today I would like to discuss one of those situations where buying options rather than selling them might be the better bet.
If you read down further, there is information on how you can become a Terry’s Tips Insider absolutely free!
An Interesting Straddle Purchase Opportunity in J.P. Morgan (JPM)
Implied Volatility (IV) of an option price is supposed to measure the market’s expectation of how much the underlying security will fluctuate in one year. If an options series has an IV of 20, the market expects the stock will move either up or down by 20% over the course of a year.
Sometimes there is a huge difference between IV of the options and the actual price behavior of the stock. For example, check out . . .
Tags: Calls, implied volatility, JPM, Monthly Options, Portfolio, Profit, profits, Puts, Risk, Straddles, Strangles, Terry's Tips, thinkorswim, Volatility
Posted in Monthly Options, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios |
Making 36% — A Duffer's Guide to Breaking Par in the Market Every Year in Good Years and Bad
This book may not improve your golf game, but it might change your financial situation so that you will have more time for the greens and fairways (and sometimes the woods).
Learn why Dr. Allen believes that the 10K Strategy is less risky than owning stocks or mutual funds, and why it is especially appropriate for your IRA.
I have been trading the equity markets with many different strategies for over 40 years. Terry Allen's strategies have been the most consistent money makers for me. I used them during the 2008 melt-down, to earn over 50% annualized return, while all my neighbors were crying about their losses.
~ John Collins
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