Although 1Q earnings season is underway, today’s focus will be on the Fed with the latest FOMC minutes being released at 2pm (EST). After the close, there will be additional zombie talk from both the dovish and hawkish side with Wall Street looking for additional insight into the Fed’s outlook.
There were a couple of earnings trades we have targeted for the week but the list of candidates wasn’t too impressive. Finding an option trade around earnings is always a fun and rewarding challenge but there are numerous factors in deciding if you should buy call or put options to play an up or down move in a stock.
Past earnings action, chart work, fundamentals, sentiment, liquidity, and option pricing all play a role in deciding which candidates make our Watch List. These option trades can easily make 100% or more if a stock moves up or down 5%-10% but the pricing has to be right. High-beta stocks usually carry expensive premiums with wide bid/ask prices so it’s best not to overpay and to realize the profit potential before entering a trade.
The earnings playbook for next week is absolutely loaded with juicy candidates as we have already started the research. There are a number of possible call and put option trades we are looking at and we plan to be very active as our portfolio is light.
Even better, the recent trades we have opened continue to show strong gains, including one from Monday that has just tripped a 122% return – in 2 days!
We want to lock-in profits on a quarter of a position so we are going to press a little early today. We could also be adding New Trades or have additional Profit Alerts so monitor your email inboxes throughout the day or follow us on Twitter to know the moment we take action.
As far as the indexes, the Dow is up 34 points to 16,290 while the S&P 500 is gaining 2 points to 1,854. The Nasdaq is advancing 15 points to 4,128 and the Russell 2000 is higher by 3 points to 1,147.
Subscribers, check the Members Area for the trade updates and stay locked-and-loaded into the close!