Earnings-Related Options Ideas
We’ve entered into another round of high-profile earnings releases, and as our routine readers are well aware, this has become a key device in our seeking of quick-strike profits with options trading.
Ebay, Inc. EBAY
On EBAY, we’re going to size up contracts in the $58.50-60 Call range, looking for a classic dip-and-rip scenario. Usually on a gap-up after an earnings beat we see profit-taking which leads to a pullback followed by a resulting bounce. We look to get positioned in some in-the-money calls on the pullback that we can unload when the rebound occurs.
Caterpillar, Inc. CAT
CAT beat on earnings as well, and the range of contracts that we’re most likely going to find the biggest chances for gains here, should fall between $86-89. We want to stay in the money with our strike price and roll it up in the event the stock breaks out more sharply.
Petroleo Brasiliero S.A. (Petrobras) PBR
For PBR, which is sliding back following yesterday’s post-market earnings release, we’re going to look for possible opportunities in Weekly Puts in the $9.00-8.50 range, depending on the intensity of the downward pressure we see on the stock as the market opens.
Enzon Pharmceuticals, Inc. ENZN
This is a stock that we want to put on our radars as we head into week’s end; biopharmas have been hot, and ENZN is among those that have been breaking out. We’re anxious to see how this play will continue to fare as it has been streaking into the blue sky.
It’s much like the move we saw in the past couple of weeks from VLTC, which spiked on news of an increased stake by billionaire activist investor Carl Icahn. It so happens that Icahn also owns shares in ENZN, which makes for an interesting side note. We’ll certainly want to keep this one in our sights moving forward.
Yahoo, Inc. YHOO – Options Ideas
If you recall, we were sitting on the fence with our approach to YHOO options yesterday as the internet search giant had fallen short on earnings. We noted that the heaviest action would likely be in the $44-45 Calls or Puts, depending on the tone of the trend.
It became quickly apparent that YHOO was pulling back further upon the open,and anyone who followed our idea and latched onto the $44 Puts were in for quite a ride as those contracts traded in a range from .17-.55; an intraday swing of 223% The $45 Puts also made a move from .56-1.29, a slightly more subdued yet still very respectable 130%
Great Basin Scientific, Inc. GBSN
We need to congratulate anyone who caught our flag of GBSN in yesterday’s premarket report, as the stock made a healthy intraday run from 4.60-6.10 that could have afforded traders gains of up to 33% on the day on the heels of some FDA-related news.
Extended Watchlist:
CYTX, BTU, SCYX, IBIO