We selected a wide range of puts in the DG chain on Tuesday morning, the DG Weekly $109-103 Puts following the company’s earnings release, wherein it lowered its outlook for the year. Despite a sales beat, shares slid considerably. With the help of an overall market downtrend in which the Dow took an 800 point hit, every set of contracts we selected made multi-bag gains.
$109 Puts – Range: 2.20-6.80- Max Gain: 209% $108 Puts – Range: 1.76-5.80 – Max Gain: 230% $107 Puts – Range: 1.25-4.40- Max Gain: 252% $106 Puts – Range: .88-4.18- Max Gain: 375% $105 Puts – Range: .55-3.30 – Max Gain: 500% $104 Puts – Range: .40-2.53- Max Gain: 532% $103 Puts – Range: .30-1.90 – Max Gain: 533%
MIK Weekly $15 & 17.50 Calls
Aphria, Inc. APHA
We’ve had an eye on Aphria, and indeed the whole Canadian cannabis market, for years. Having previously been traded under the symbol APHQF on the OTC Markets, the Canadian cannabis company now trades on the NYSE and bills itself as a drug manufacturer in the healthcare industry.
As a result of allegations against the company, the stock has taken a severe beating in recent sessions. We’re going to begin to observe more closely as a potential bottom bounce play in the days and weeks ahead, as it has reached the point of being heavily oversold with a huge short interest. We’ll want to be hanging around when the shorts start to get squeezed.
After a tumultuous month on the whole, October came to a solid end with a very strong performance from the markets, and in effect, a good showing by many of the ideas we presented in yesterday’s report.
Take-Two Interactive Software, Inc. TTWO – First we’ll give an update on the calls we made on Tuesday morning for TTWO- the Weekly $122-125 Calls. They started moving immediately, as we mentioned in yesterday’s report, and after another session the gains have piled up even higher.
Our regular readers know that quick-strike options trading of plays that have just seen their quarterly earnings releases are among our favorite scenarios. The volatility afforded to us by these events is key to the type of opportunities we are commonly after.
This morning, we have NKE which has untraded-upon earnings reported in the post-market yesterday, and Carmax which dropped its report in the premarket today. We’ve got a set of bearish ideas for NKE and bullish ideas for KMX.
We’ll place the following targets on our watchlist today to monitor throughout the remainder of the week:
CarMax, Inc, KMX Weekly $77-79 Calls
Nike, Inc. NKE Weekly $83.50-81.50 Puts
L.B. Foster Co. FSTR
We also have a longer term idea for the FSTR chain. As you can see on the chart snapshot we’ve included below, the stock is presently exhibiting a strong multiple-bottom.
We’re going to place the FSTR 10/19 $22.50 & $25 Calls on watch in the likely event that a recovery does occur.
Our first order of business today will be to recap the fantastic single-session performance posted by our fresh options ideas for CarMax. We highlighted the KMX Weekly $75-78 Calls and were impressed with the subsequent trading activity.
Traders could have banked the following profits off of those ideas, all of which breached into multi-bag gain territory.
$75 Calls – Range: 2.00-6.54 – Max Gain: 227% $76 Calls – Range: 1.50-5.30 – Max Gain: 253% $76.50 Calls – Range: .95-4.90 – Max Gain: 416% $77 Calls – Range: .65-4.27 – Max Gain: 557% $78 Calls – Range: .40-3.30 – Max Gain: 725%
Another pick of ours that we want to return to was one we made midway through last month, in TNDM. The stock has has essentially been on one continuous bull run since that time.
From the 11.38 low it registered on the morning on our initial alert (May 16th) the stock gradually reached a new high on Friday coming in at 25.50. That’s an increase of 124% in just five weeks! We would consider that beyond respectable for a stock that was trading over eleven bucks when we first called it.
To start things off this morning, we’re immediately drawn to the most recognizable name on the premarket earnings calendar for the day. Delta has been beaten back over the past few weeks, to the point of approaching heavily oversold territory, especially as the PPS fell below the 50DMA for the first time since the second week of February. When that did occur, the stock launched into a month-long bullish pattern. All of this is plainly evident on the chart snapshot below.
With this morning’s beat on earnings as a catalyst, we’ll look for a similar pattern to emerge this time around, and begin tracking the DAL 04/13 51.50-53 Calls.