Add AXP and BWLD Earnings Plays

One Conservative, One Speculative

By Bryan Bottarelli
Tuesday, October 18, 2011 10:58 AM EDT
Tue, 18 Oct 2011 14:58:00 GMT

PLAY: Buy the AXP November 46 Calls (O:AXP 11K46.00) and the AXP November 45 Puts (O:AXP 11W45.00) at market, good for the day. Do not place a stop limit or sniper sell at this time.

PLAY: Buy the BWLD November 60 Calls (O:BWLD 11K60.00) and the BWLD November 55 Puts (O:BWLD 11W55.00) at market, good for the day. Do not place a stop limit or sniper sell at this time.

Dear Bottarelli Research Member,

After two highly successful plays on PII and GMCR, it sure looks like we’re getting the volatility we need to make nice profits off our directional and earnings plays. Therefore, as we wait for JNPR to report this evening and SNDK and APKT to report after the close on Thursday, I’d like to offer you two additional earnings plays for after the close tomorrow. One is a more conservative play while the other is more speculative (yet potentially explosive).

Here’s the story...

The more conservative play is American Express Company (AXP – NYSE). With $1 strike-price increments, we can own the November 45/46 combination for around $3.60. On any sort of earnings-based move, we can come out in the money. Granted, I don’t expect AXP to blast off, but based on this pricing, we don’t need it to. A $4.00 move (up or down) would do the trick. So, as the more conservative of today’s two earnings plays, let’s get positioned for AXP’s earnings now.

axp

PLAY: Buy the AXP November 46 Calls (O:AXP 11K46.00) and the AXP November 45 Puts (O:AXP 11W45.00) at market, good for the day. Do not place a stop limit or sniper sell at this time.

The more speculative play is Buffalo Wild Wings (BWLD – NASDAQ). With the NBA season in jeopardy, any hint of a possible slowdown in growth could send investors running for the exits. Conversely, strong numbers could lead to an aggressive upside pop. I’m calling this one more speculative because BWLD has $5 strike price increments. But, since the stock price currently falls right at the midpoint of the two, the risk is somewhat reduced. Either way, we still need a big move which BWLD is certainly capable of making. So, as a more speculative play, let’s play this one using a November call and put combo.

bwld

PLAY: Buy the BWLD November 60 Calls (O:BWLD 11K60.00) and the BWLD November 55 Puts (O:BWLD 11W55.00) at market, good for the day. Do not place a stop limit or sniper sell at this time.

And as always…

Lock and load!

Sincerely,

Bryan Bottarelli
Editor, Bottarelli Research
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