MomentumOptionsTrading.com Midday Update for 6/11/2014
BlackBerry (BBRY) on Deck with Earnings/ 2 New Trades / Profit Alert !!!
The 1Q earnings season has been over but I have mentioned there are companies reporting into mid-to-late June worth watching. The will be a serious continued slowdown leading into the July 4 holiday but the explosion of 2Q earnings will start to hit Wall Street the second full week next month. For now, there are opportunities but it might be best to use strangle option trades when playing earnings.
BlackBerry (BBRY, $7.84, down $0.02) will announce their numbers ahead of Thursday’s open and with anticipation low, the company could surprise to the upside.
The July 8 calls (BBRY140719C00008000, $0.44, down $0.02) are trading for 50 cents and could be a good lottery trade for a run to $9. Of course, BlackBerry would have to wow Wall Street and post some impressive growth but those heydays are likely over.
In case of a disappointment, the June 8 puts (BBRY140621P00008000, $0.49, up $0.01) or the July 7 puts (140719P00007000, $0.18, flat) could be used as “protection” to play a possible drop below $7.
There are over 30 analysts following the stock and the estimates range for a loss of 2 cents to an incredible 52 cents a share loss for the quarter. If by a miracle the company announces a profit, shares could soar as short-sellers run for cover. Not likely, but possible.
I’d rather sit on the sidelines and wait until BlackBerry returns to profitability before trying to catch a falling knife. I do like trading the stock and at some point there might be an opportunity to invest but this quarter could be a good tell if the company will even be around next year.
Heading into the second half of trading, the Dow is down 87 points to 16,858 while the S&P 500 is declining 5 points to 1,945. The Nasdaq is lower by 2 points to 4,337 and the Russell 2000 is slipping 5 points to 1,167.
There are some current trades swelling up as there are 2 trades up 78% and 80%, respectively. I also have 2 new additions I’m adding to the portfolio.
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