My trades

optionsinvestor said:
That's interesting, I'll look into that, since we've got a bit of time, and the oi is holding at 40k. But, right off the bat, I would think it's a large fund hedging his long position. If there were no other volume at other expiration or strike price to match, then he's prob long 40k puts to hedge his long stock position.

I traded $A back in November and it finally broke the string of gaping up following its earning results. My initial guess is that the fund manager probably saw that too, and with the market just pushing up, he wants to hold $A, but is playing it cautiously with a hedge. That's how I would play it if I held stock in $A leading up to its report this time around. If you look at the previous 4 reports, $A had traded up every time after its report except for the most recent one. That change could be the start of a change in investor sentiment that could lead to more sell off following its earning report.
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O.I., I just looked up Time and Sales Report on those "A" Feb70 puts on my I.B. TradeStation.
I didn't realize that I could back go a week with Time and Sales Reports or I would included this info in my last post.
Anyway those contracts were sold below the Bid Price, so they had to be a company Insider
selling the puts knowing that good earnings were going to be reported.
Here is how the Time and Sales Report reads:
30,000 at .56 with a Bid=.59 / Ask=.64
8,791 at .56 with a Bid=.59 / Ask=.62
the other couple thousand contracts were randon amounts.
 
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Selling puts at the 70 strike. That level is a reasonable support level, it was resistance in November. I bet Pete and Jon Najarian saw this one. The original trader took that 30K, then there were a bunch of followers adding more to it. I wouldn't put this trader as a company insider, because it would be too easy to trace. But I bet it's someone big who might know something. Insiders would play it small and spread it out over several strikes and expiration to limit exposure to SEC. There's no doubt who ever put that trade on knows something though. Agilent Tech's last report was not bad at all. The price action was just bearish.

I wouldn't be surprise if you get a 3-4 pt pop in A after its report this time around. Agilent had a good report in November with strong guidance for this quarter too. I haven't looked at A's options to see if the risk ratio is worth it for me though. I just had a bad taste last time around, but I usually take a look at these about 2 days before their report date to see how everyone has positioned themselves. If I were playing for A's earning report, right now is just too early for me. If I'm playing the momentum move, then I'd get in now and close out just ahead of earnings.
 
I wasn't sure if I wanted to grab this position in LRCX (strong earning report and guidance for FY, but shares fell), but after reviewing a very good report from INTC I am in this position. I'm starting with LRCX Feb 205 call this morning and I'll see if I need to adjust higher or add more. This is just 1 call, so risk isn't overwhelming.
 
CREE 34.66 FEB options (expire 16th) look undervalued.
Straddle FEB35C=1.03 /FEB35=1.58 for under 3.00 on CREE looks tempting.
Looking at this again, there may not be enough time left on the Feb's for a straddle and I think it already reported earnings?
 
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jeffalvinson said:
CREE 34.66 FEB options (expire 16th) look undervalued.
Straddle FEB35C=1.03 /FEB35=1.58 for under 3.00 on CREE looks tempting.
Looking at this again, there may not be enough time left on the Feb's for a straddle and I think it already reported earnings?
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Yep, CREE reported this past Tuesday after market closed. I did not look at that report.

I am actually in the process of adding INTC calls for a momentum run. I'm looking at 1-2 week expiration date where I want to see if INTC has the momentum to make a fast 3-4 day run like how it did in its last report of 2017. At that time, INTC ran from $43 open following the report to $47 for about a 9-10% pop in 5 days. It opened at $48 today, I'm looking for $52-$53 by next Friday. I haven't taken this position yet, because I wanted to make sure the gains held through lunch time. Usually, if it holds through the afternoon, it should be good unless the entire market tanks. But I'm leaning on next Friday's exp using INTC 48-50 call for a quick run. Sometimes, they overshoot like what NFLX is doing, and other times they don't reach my target. I do like INTC though (tech sector in chips where there's a turn around that's still new, and the Nasdaq has bounced back to lead the market with the DJIA).
 
It appears INTC blew away earnings Est= +.87 vs Actual= +1.08 and today its spiked above its recent trade range.
For me ideally, I like to buy a cheap straddle or strangle right before earnings in hopes the earnings event blows up the call or the put enough for a net profit on the total debit.
 
I went with the INTC Feb wk1 48 calls just under $2. I'll try to flip these for a 100% return by Wednesday. It's going to be tight, so I'll need some strong results from the tech sector next week too. Other than that, just watched ADBE, FB, and NFLX notch a small rally into the close with Nasdaq hitting record highs. Only thing not moving is LRCX, bought the call at 6.7 and it's down to 5.
 
truetype said:
Except that straddles are expensive, not cheap, right before earnings. MMs aren't stupid.
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It's true, that's why I calculate the average of the stock's last 4-5 post earning report move to see whether the average move is higher than the straddle that will be set up. Ex. If the straddle cost 7% of the current stock price, and the stock has averaged 10% swings in its last 4-5 reports, then playing the straddle is worth it to me. I'd say anything under 20% above the cost of the straddle is probably not worth it.

But like you say, MMs aren't stupid; they're also not fortune tellers, so if your calculation gives you an advantage, you've got to take the risk. It doesn't payoff all the time, but when it does you are making more than the losses you took.
 
optionsinvestor said:
It's true, that's why I calculate the average of the stock's last 4-5 post earning report move to see whether the average move is higher than the straddle that will be set up. Ex. If the straddle cost 7% of the current stock price, and the stock has averaged 10% swings in its last 4-5 reports
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Equity deriv desks at the banks all calculate and screen on this. Ask your coverage for the relevant reports -- it'll save doing it by hand.
 
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