Terry's Tips Stock Options Trading Blog
March 18th, 2013
While the earnings season is winding down, there are several companies announcing this week, and we are trading three of them. I would like to share one of these with you, the one involving Nike.
If you read down further, there is information on how you can become a Terry’s Tips Insider absolutely free!
How to Play the Nike (NKE) Earnings Announcement
Calendar spreads in NKE seemed so attractive that we placed 20 Apr-Mar4 spreads last week at three different strikes for an average cost of only $.33 – if the stock ends up anywhere between $52.50 and $57 (currently about $54.50), the long side of one of those spreads with four weeks of remaining life should be worth at least $1.00, more than covering the cost of all three.
I checked prices this morning and the three spreads could be purchased for only a little more – an average of $.35.
NKE announces earnings on Thursday, March 21st after the close. Expectations seem to be . . .
Tags: Calendar Spreads, Calls, diagonal spreads, Earnings Announcement, Earnings Option Strategy, Earnings Play, implied volatility, Neutral, NKE, Overbought, Oversold, Portfolio, Puts, Stocks vs. Stock Options, Terry's Tips, thinkorswim, Weekly Options
Posted in Earnings Announcement Options Strategy, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options |
March 12th, 2013
A lot of our discussion lately has focused on pre-earnings-announcement strategies (we call them PEA Plays). This has been brought about by lower option prices (VIX) than we have seen since 2007, a full six years ago. With option prices this low it has been difficult to depend on collecting premium as our primary source of income with our basic option strategies.
But the earnings season has now quieted down and will not start up again for several weeks, so we will return to discussing more conventional option issues.
Terry
Using Puts vs. Calls for Calendar Spreads
It is important to understand that the risk profile of a calendar spread is identical regardless of whether puts or calls are used. The strike price (rather than the choice of puts or calls) determines whether a spread is bearish or bullish. A calendar spread at a strike price below the stock price is a bearish because the maximum gain is made if the stock falls exactly to the strike price, and a calendar spread at a strike price above the stock price is bullish.
Tags: Auto-Trade, Bearish Options Strategies, Bullish Options strategies, Calendar Spreads, Calls, Credit Spreads, diagonal spreads, ETF, Out-Of-The-Money Calls, Out-Of-The-Money Options, Profit, Puts, SPY, Terry's Tips, thinkorswim, VIX, Volatility
Posted in 10K Strategies, Monthly Options, SPY, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options |
March 4th, 2013
OptionsXpress no longer offers their Auto-Trade service which enabled clients to follow their favorite newsletter’s recommendations without placing each trade themselves.
This is just another reason why thinkorswim is a much better alternative for anyone who wants to trade options, and you can now get over $300 worth of free services from us at the same time.
Use this link to sign up – open thinkorswim account – and once you . . .
Tags: Auto-Trade, Calendar Spreads, Calls, Credit Spreads, CRM, diagonal spreads, Earnings Announcement, Earnings Option Strategy, Earnings Play, implied volatility, Profit, profits, Puts, Stocks vs. Stock Options, Terry's Tips, thinkorswim, VIX, Volatility
Posted in Earnings Announcement Options Strategy, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options |
February 26th, 2013
Last week I gave you an option play on Tesla Motors (TSLA) to be placed just before they announced earnings. Since there were no weekly options available, the March series was sold. By the end of the week, a small gain had been made in the portfolio but the real gains will not come until the March options expire on the 16th.
Today I would like to tell you about . . .
Tags: ANF, Calendar Spreads, diagonal spreads, Earnings Announcement, Earnings Option Strategy, Earnings Play, HLF, implied volatility, PEA, Portfolio, Pre-Earnings-Announcement, Profit, profits, Terry's Tips, thinkorswim, TSLA, VIX, Volatility, Weekly Options
Posted in Earnings Announcement Options Strategy, Last Minute Strategy, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options |
February 19th, 2013
Last week I gave you an option play on Buffalo Wild Wings (BWLD) that ended up making a 63% gain. This week I am offering another pre-earnings announcement, this time on Tesla Motors (TSLA). If you want to try this strategy you will have to hurry because the announcement is due after the close on Wednesday, February 20.
Options Strategy for the Tesla Motors Earnings Announcement
In case you want to know the details of my thoughts on this company which makes electric cars, check out my Seeking Alpha article – How to Play the Tesla Motors Earnings Announcement.
In a nutshell, I think the likelihood of the stock going up after the announcement is very low. To my way of thinking, it is hopelessly
Tags: BLWD, Buffalo Wild Wings, Calendar Spreads, Calls, diagonal spreads, Earnings Announcement, Earnings Option Strategy, Earnings Play, implied volatility, Monthly Options, Portfolio, Profit, profits, Puts, Terry's Tips, TESLA, thinkorswim, TSLA
Posted in Earnings Announcement Options Strategy, Last Minute Strategy, Monthly Options, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios |
February 14th, 2013
Terry’s Tips Subscribers Score Big Win With NTAP Earnings Play
In anticipation of Network Appliance’s (NTAP) earnings announcement after the close on Wednesday, February 13, on Monday the following trades were made when the stock was trading about $35.50:
BTO 15 NTAP Jun-13 38 calls (NTAP130622C38)
STO 15 NTAP Feb-13 36 calls (NTAP130216C36) for a debit limit of $.77 (buying a diagonal)
BTO 12 NTAP Jun-13 33 puts (NTAP130622P33)
STO 12 NTAP Feb-13 35 puts (NTAP130216P35) for a debit limit of $.82 (buying a diagonal)
These trades cost $2139 to place plus $68 in commissions for a total of $2207. In addition, the broker imposed . . .
Tags: diagonal spreads, earnings announcements, Earnings Option Strategy, Earnings Play, implied volatility, NTAP, Portfolio, Profit, profits, Risk, Terry's Tips, thinkorswim
Posted in Earnings Announcement Options Strategy, Last Minute Strategy, Stock Options Strategies, Terry's Tips Portfolios |
February 13th, 2013
Closing Out the Buffalo Wild Wings (BWLD) Spreads
If you recall, on Monday I recommended buying the following two spreads while BWLD was trading about $77 in advance of Tuesday’s earnings announcement after the close:
BTO (buy to open) 6 BWLD Jun-13 85 calls (BWLD130622C85)
STO (sell to open) 6 BWLD Feb-13 80 calls (BWLD130216C80) for a debit of $1.40 (buying a diagonal)
BTO (buy to open) 4 BWLD Jun-13 70 puts (BWLD130622P70)
STO (sell to open) 4 BWLD Feb-13 75 puts (BWLD130216P75) for a debit of $.90 (buying a diagonal)
In my personal account, after sending out this recommendation, just to make . . .
Tags: Buffalo Wild Wings, BWLD, Calendar Spreads, diagonal spreads, Earnings Option Strategy, implied volatility, Portfolio, Profit, profits, Risk, Terry's Tips, thinkorswim, Volatility, Weekly Options
Posted in Earnings Announcement Options Strategy, Last Minute Strategy, Stock Options Strategies, Terry's Tips Portfolios |
February 12th, 2013
Apple’s Fundamental Great Value May Soon Get a Gigantic PR Boost
Apple (AAPL) has become one of the least expensive stocks in the entire market based on a fundamental value. Subtracting out its $128 per-share cash value ($121.3 billion/939 million shares outstanding), its trailing P/E is a ridiculously-low 7.9. Even if you do not adjust for cash, the trailing P/E is 10.88 and forward P/E is 9.43 according to Yahoo Finance.
The company pays a 2.2% forward dividend rate and the pay-out ratio is only 12% so there is an excellent chance that this will increase in the future or some other cash-distribution method such as the preferred stock proposal advanced by hedge fund manager David Einhorn is instituted.
The only way that such a low valuation could be justified would be if the growth rate slowed dramatically. Surely, it will fall significantly from the nearly 50% growth numbers that it has sported for the last five years, but the culture of this company is to continually come up with new products which will appeal to its growing base of satisfied customers, and it has barely scratched the potential in China (where Tim Cook said would be their largest market). This year Apple will probably seal a deal with China Telecom (CHA), the largest mobile carrier by far in the world.
Here are the YOY growth rates over the past five years:
Tags: AAPL, Portfolio, Profit, profits, Risk
Posted in AAPL, Terry's Tips Portfolios |
February 11th, 2013
Last week I wrote an article explaining why I thought that Green Mountain Coffee Roasters (GMCR) would move higher after its earnings announcement. I was totally wrong. The stock fell by nearly $5.
In one of my Terry’s Tips portfolios, I placed a diagonal spread which would do best if GMCR moved higher (as I expected it would at the time). In spite of its moving lower, I closed out the spread the day after earnings for a 30% gain after commissions. Not a bad return when you are totally wrong.
Today I would like to propose a similar diagonal spread to be used on another company which will announce earnings next week (on Wednesday, after the close).
Tags: Buffalo Wild Wings, BWLD, Calendar Spreads, diagonal spreads, implied volatility, Portfolio, Profit, profits, Puts, Risk, Terry's Tips, thinkorswim, Volatility
Posted in Earnings Announcement Options Strategy, Last Minute Strategy, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options |
February 5th, 2013
After the market close tomorrow, Green Mountain Coffee Roasters (GMCR) will announce quarterly and year-end earnings. I am quite bullish on the stock, and have written a Seeking Alpha article explaining why – Why Green Mountain Coffee Roasters Will Soar This Week
(I apologize for its being so long, but as Abraham Lincoln once said in a letter he wrote to a friend, I didn’t have enough time to make it shorter.)
Options Strategy for the Green Mountain Coffee Roasters Earnings
If you I have a strong feeling for a particular stock prior to their making an earnings announcement, there are a couple of strategies I like to employ. I would like to tell you about one of them today. It involves a little hedge just in case I am . . .
Tags: Bullish Options strategies, Calls, diagonal spreads, Earnings Option Strategy, GMCR, Green Mountain Coffee Roasters, implied volatility, Profit, profits, Puts, Risk, Terry's Tips, Volatility, Weekly Options
Posted in Earnings Announcement Options Strategy, Last Minute Strategy, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options |
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