We often visit the local Starbucks (SBUX, $80.14, up $0.42) in Our Town when the keurig runs out of pods. There is a Big Lots (BIG, $32.21, down $4.92) store across the street and the parking lot tends to be sparse when we make our visits to Starbucks and at other times when traveling by.
Needless to say, when we were doing our homework for the Weekly Wrap last weekend, we were excited to see the company would be reporting earnings today. Each week, we look at possible earnings trades and then do research on the stocks that could move 5%-10% based on the news could be.
There is a lot of homework that goes into predicting a price move as there are numerous factors that could sway the stock, including the current market trend.
Although we felt fairly confident the bulls would pull through today, we also wanted some “put” protection ahead of this morning’s Nonfarm Payrolls report (203,000 jobs were added). Big Lots was the perfect candidate because our research was showing an earnings miss and lowered guidance. Bingo.
Our homework also showed a company in transition with new management taking over for old management. We have also followed the stock for a few years so we were familiar with the chart as shares tend to make large price movements.
We recommended getting into the Big Lots December 35 puts (BIG131221P00035000, $2.90, up $2.20) in our afternoon update on Thursday and here were our thoughts this morning inside our Members Area after the company reported earnings last night:
“The company couldn’t wait to announce its earnings miss as they reported their numbers after the bell last night instead of this morning. Big Lots reported a loss of 16 cents a share that was double the estimates for a loss of 8 cents. Revenues of $1.15 billion also came up short by $10 million. The company also said it will exit its Canadian operations and lowered guidance for the current quarter and fiscal year. Nasty.” (END)
As you can see, the options have more than doubled today and we locked-in profits of 100% in under 24 hours. Some of our subscribers have done much better as we were out at $1.80 on the open but we aren’t complaining and are thrilled they maximized their gains.
We also profiled a Krispy Kreme Doughnuts (KKD, $19.90, down $0.17) put option trade in our Weekly Wrap that zoomed nearly 200% but we didn’t make it an “official” recommendation for the Daily as we were already short the stock in our Weekly.
We will try to do a video this weekend for our trading course members on what earnings trades we are looking at for next week and how we go about doing our homework. If you have not purchased our options trading course, How to Trade Options on Momentum Stocks, we urge you to upgrade to a 1-year subscription as the course, videos, and trading manual are included at NO CHARGE if you upgrade this month. This is an $895 value and the course is shipped to you doorstep on our dime.
We are putting the finishing touches on the updated 2014 version of the course and we will be going to press next week as we get them ready for Christmas shipments!
This is the only time of year we run our promotion and it is our best deal as we want you to ALWAYS be in or following the market. You never know when a 100% winner will fall into you lap but you will have a better idea if you follow us EVERY day.
Over HALF of our long-time current subscribers use this upgrade every December and it our way of thanking them for supporting us over the years. We are wrapping up our 6th-straight year of profitable trades and we are proud to say we should end 2013 with a gain of 200%-250% for our Daily portfolio. This means a $10,000 investment could have turned into $35,000 had you taken all of our trades this year.
We have never had a losing year and we doubt other option newsletters can match our results. Do yourself a favor and use this coupon code
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You can also call us today and all weekend with your questions. We will also include another special offer if you call us so we urge you to do so. We can be reached at 804-349-4466.
We said there was a good chance the bulls would hold support and rebound today and it is good to see the gains holding. Resistance that served as prior support has been cleared on the Blue-Chips and the S&P 500. Tech and the Small-Caps are pushing fresh all-time highs.
The Dow is currently up 192 points to 16,016 while the S&P 500 is higher by 20 points to 1,805. The Nasdaq is advancing 33 points to 4,066 while the Russell 2000 is gaining 11 points to 1,133.
We have some last minute updates before we roll but like always, we will be watching the close up until the final minute. If you don’t hear from us again, we will be back Sunday night with the Weekly Wrap and on Monday morning with the Daily. Until then, have a great weekend and make sure you give us a call and upgrade your membership!