In a previous article, “Company Earnings and Stock Options Straddle“, we outlined a strategy for taking advantage of “earnings season” for making stock options investments. The idea behind this strategy is for a company’s stock price to deviate more than the net debit as a result of good or bad news published in the earnings report, realizing a profit for the investor.
With earnings season in full swing, we executed a search on October 16, 2006 for stock option straddles positions expiring on November 17, 2006 (November stock options expiration day) for technology stocks expecting to announce earnings in the very near future. The results of this search are shown below:
| SmartSearchXL Straddle Search for October 16 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock Sym |
Stock Price 10-16-06 |
Expire &Strike |
Call Symbol |
Call Ask |
Put Symbol |
Put Ask |
Net Debit |
Earnings Date |
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| SBL | 15.18 (+0.09) | 06 NOV 15.0 (33) | SBLKC | $0.45 | SBLWC | $0.15 | $0.60 | 10/30/2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| MCRS | 50.19 (+0.16) | 06 NOV 50.0 (33) | MFKKJ | $2.65 | MFKWJ | $2.20 | $4.85 | 10/26/2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GLDN | 34.67 (-0.83) | 06 NOV 35.0 (33) | QDVKG | $2.00 | QDVWG | $2.15 | $4.15 | 10/30/2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CRYP | 17.31 (-0.22) | 06 NOV 17.5 (33) | UFWKW | $1.35 | UFWWW | $1.45 | $2.80 | 10/30/2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| EQIX | 65.08 (+0.57) | 06 NOV 65.0 (33) | FQSKM | $3.80 | FQSWM | $3.50 | $7.30 | 10/25/2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Analysis
The stock symbols SBL, GLDN and EQIX have experienced significant price appreciation in the last few months and are all currently near their 52-week high, one hint of bad news during one of these earnings report and its probably “down we come”, but a very good earnings report for one of these companies may induce more upward movement. The stock symbol CRYP on the other hand is just the opposite, it is currently near its 52-week low stock price, and a report of good news may send this stock significantly higher, while bad news will probably continue the downward trend.
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PowerOptions provides Internet based tools for analyzing stock options with specific search criteria and for finding potentially lucrative option income. For those seeking to execute a long straddle investment strategy for their personal portfolios, PowerOptions provides an Internet based search engine for finding potentially lucrative income producing long straddle options positions.
[tags] stock price, investment strategy, option income, option straddles, poweroptions, stock options, stock symbols [/tags]