Q1 Earnings season

O

oldnemesis

Q1 earnings reports begin with Alcoa reporting after market close on Monday.

http://www.thestreet.com/story/1352...cus-in-week-ahead.html?puc=yahoo&cm_ven=YAHOO

"The early prognosis on companies' quarterly performances doesn't look good"

There's seems little reason to believe that the S&P will rally.

http://finance.yahoo.com/echarts?s=SPY+Interactive#{"range":"5y","allowChartStacking":true}

Bearish bet:
With SPY at 204.5
Jan '17 225/230 bear call spread for a net credit of $91
Yield = 91/409 = 22.2% in 286 days or 28% annually
Prob = 78%
Expectation = .785(91) - .165(409) - .05(205) = 71.44 - 67.48 - 10.25 = -6.3

Price........... Profit / Loss........... ROM %
150.00............... 91.00................ 22.20%
200.00............... 91.00................ 22.20%
210.00............... 91.00................ 22.20%
225.00............... 91.00................ 22.20%
225.91................. 0.00.................. 0.00%
230.00............ (409.00).............. -77.80%
240.00............ (409.00).............. -77.80%
260.00............ (409.00).............. -77.80%
280.00............ (409.00).............. -77.80%
 
Well... maybe I'm over stating the "BAD BAD" part.

I really just need the S&P not to go up much more.

I do have a few bull put spreads running but they all have substantial space before they will be threatened by a pull back. Also a number of them are utilities (XLU) and bonds (TLT, BND)...which are pretty immune to S&P level.

So I'm set.

Let's see how Alcoa does:

http://finance.yahoo.com/news/live-alcoa-reports-earnings-191749825.html

OK.

After hours both Alcoa and SPY are down a few pennies.
 
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