The Google (GOOG) spreads I recommended last week resulted in average gains of 58% (after commissions) in Terry’s Tips actual portfolios. Not a bad day. The stock fell after the announcement just as we had guessed.
Read to the bottom of this letter to learn how you can become a Terry’s Tips Insider for absolutely no cost.
How To Play The Seagate Technology Earnings Announcement This Week
I have written a Seeking Alpha article explaining how I would play Seagate Technology (STX) this week: How To Play The Seagate Technology Earnings Announcement This Week
There are many similarities between the situation in GOOG and Seagate. I expect the stock to fall after the announcement, and have recommended to buy Aug-13 48 calls and sell Jul4-13 47.5 calls (a diagonal spread) which does best if the stock remains flat or falls.
Please read the entire Seeking Alpha article to get my full thoughts on the diagonal spread play and why I expect the stock will trade lower after the announcement.
A similar situation exists in Starbucks (SBUX) and I have recommended a less risky trade in that company – buying Aug-13 72.5 calls and selling Jul4-13 calls at a credit. This spread will make money no matter how low SBUX might fall and only starts losing money if the stock moves about $2 higher.
Good luck if you do something this week in Seagate or Starbucks!
Tags: Calendar Spreads, Calls, Credit Spreads, diagonal spreads, Earnings Announcement, Earnings Option Strategy, Earnings Play, implied volatility, Portfolio, Profit, profits, Puts, Risk, Seagate Technology, STX, Terry's Tips, thinkorswim