from the desk of Dr. Terry F Allen

Skip navigation

Member Login  |  Contact Us  |  Sign Up


Posts Tagged ‘earnings announcements’

Terry’s Tips Subscribers Score Big Win With NTAP Earnings Play

Thursday, 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 a $3000 maintenance requirement on the account (15 contracts at $200 each – the 12 put spreads did not require a charge because we couldn’t lose on both put and call spreads – it was essentially a short iron condor).

On Thursday, the morning after the announcement, the following trades were executed while NTAP fluctuated between $35 and $36:

BTC 15 NTAP Feb-13 36 calls (NTAP130216C36)
STC 15 NTAP Jun-13 38 calls (NTAP130622C38) for a credit limit of $1.28  (selling a diagonal)

BTC 6 NTAP Feb-13 35 puts (NTAP130216P35)
STC 6 NTAP Jun-13 33 puts (NTAP130622P33) for a credit limit of $1.39  (selling a diagonal)

BTC 6 NTAP Feb-13 35 puts (NTAP130216P35)
STC 6 NTAP Jun-13 33 puts (NTAP130622P33) for a credit limit of $1.50  (selling a diagonal)

The total collected from these sales was $3654 less $68 commissions, or $3586.  The profit was $1379, or 62% of the cash outlay for the spreads.

There is a question as to how much of the $3000 maintenance requirement was actually at risk since the long sides had 4 months of remaining life and would have a value no matter where the stock price ended up.  If we assume that half this amount was truly at risk, the return for the trades would be reduced to 37%.

Whether the actual return after commissions was 62% or 37%, it was a nice Valentine’s Day for the Terry’s Tips subscribers who participated in these trades.


A Remarkably Safe Way To Play The Apple Earnings Announcement

Tuesday, January 22nd, 2013

Apple announces earnings Wednesday after the close and I have come up with a strategy that looks like it can make a decent gain for the week (ranging from 5% to 15%) with almost no chance of incurring a loss. 

The big downside of the strategy is that it requires an investment of about $16,000.  I understand that many subscribers are looking for less costly option investments.

 However, if you can afford an investment of this size, check out the Seeking Alpha article I wrote just yesterday. 


Here is the link – A Remarkably Safe Way To Play The Apple Earnings Announcement 

This is the third week in a row that I have offered a strategy centering on the unusually-high option prices in the series that expires just after an earnings announcement. 

The first play was for Wells Fargo – How to Play the Wells Fargo Earnings Announcement for Tomorrow.  This one gained 44% after commissions. 

The second play involved eBay – How to Play the EBAY Earnings Announcement.  I waited too long to close out my spreads this time around (many subscribers gained 24% or more).  But I did manage to make 11.6% after commissions, still not a bad week. 

I think this week’s earnings-announcement play is the safest one yet in spite of the high cost  requirement.  I am also sharing with paid subscribers a most promising play in Starbucks (SBUX).

Making 36%

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.

Order Now

Success Stories

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