Play SNDK Earnings

Plus, Other Candidates to Watch

By Bryan Bottarelli
Monday, October 17, 2011 9:44 AM EDT
Mon, 17 Oct 2011 13:44:00 GMT

PLAY: Buy the SNDK November 48 Calls (O:SNDK 11K48.00) and the SNDK November 46 Puts (O:SNDK 11W46.00) at market, good for the day. Do not place a sniper sell or stop limit at this time.

Dear Bottarelli Research Member,

Good morning. As part of our new strategy adjustment, we’re going to dive head first into Q3 earnings season by playing our popular “Earnings Strangle” positions on the select group of companies that meet our strict criteria. You can see a list of these names below.

At first glance, there is one name that is clearly the best. So, we’ll get started by entering into an earnings play on this company right now. Then, we’ll decide whether or not to trade other companies throughout the week.

Earnings on Oct. 18th

  • Polaris Industries (PII – NYSE), before the open
  • Cree (CREE – NASDAQ), after the close
  • Juniper Networks (JNPR – NYSE), after the close
  • W.W. Grainger (GWW – NYSE), before the open

Earnings on Oct. 19th

  • American Express (AXP – NYSE), after the close
  • Buffalo Wild Wings (BWLD – NASDAQ), time not disclosed
  • Tractor Supply Company (TSCO – NASDAQ), after the close

Earnings on Oct. 20th

  • Acme Packet (APKT – NASDAQ), after the close
  • BJ’s Restaurants (BJRI – NASDAQ), after the close
  • SanDisk (SNDK – NASDAQ), after the close

Keep in mind, with October options expiration this Friday, we need to be smart. Therefore, we’ll only play November options going forward. Playing October this close to expiration is just too risky.

As you know, we’ve had success playing high-beta earnings trades using tight strike price increments a few days leading up to a scheduled earnings report. In that sense, I’d like to get started by jumping into a call and put combination on SanDisk (SNDK – NASDAQ).

As you know, earnings plays are always bought on a 1-for-1 basis. That way, you can be properly positioned to capitalize on any move, up or down. And with that, here’s the play…

PLAY: Buy the SNDK November 48 Calls (O:SNDK 11K48.00) and the SNDK November 46 Puts (O:SNDK 11W46.00) at market, good for the day. Do not place a sniper sell or stop limit at this time.

Should we need to jump into any other candidates, you’ll be the first to know. But until then…

Lock and load!

Sincerely,

Bryan Bottarelli
Editor, Bottarelli Research
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