Hello Traders,
Check out this earnings trade, or I should say trades and set-ups.
Just to fill you in. If you follow my trades from my newsletter you will know that I had a long position on in NKE (Nike) for earnings trade that I planned on if the stock moved up to enter a spread and shoot for doing it for free. Well, the plan worked out perfectly and I was able to get a $0.04 credit on a 2 point spread. The spread I have open now is the MAR 95c/97c spread. It expires tomorrow so the spread should be close to $2.00 if NKE is greater than 97. I just saw that NKE is trading over 102 after market. Looks like I will be able to lock in the win on this one as long as the market doesn’t do something crazy overnight.
I also opened a trade on Rite-aid (RAD is ticker). This is getting put on now for two reasons. The first is that I am trading it for an earnings trade set-up, and the second is that there has been over the top option activity at the 9 strike in multiple months. Over 100,000 contracts that I saw just today. That is huge for this underlying. So, something is going on and it is nice since I was wanting trade this company for earnings since they have a high IV Rank already. I opened the following trade today. Sold 5cts of April 8 puts, and bought 5 vertical call spreads in the MAY1 8.5c/10.5c. I was able to get the whole position open for $0.05 debit plus commissions.
I went out to May for the spread since I could get it cheap. I also will have an opportunity to sell another 5 put contracts in May if I desire to lower the cost basis more if needed.
Check out my trades on Twitter (Option_Coach) and on Facebook (Option Coach). You can also see me often in the Stock Twits feeds from Twitter. $NKE and $RAD.
Happy Trading!
Option Coach