Pre-Market Alert: Take STX Profits!
Lock in Earnings Strangle
PLAY: Within the first 30 minutes of trading, sell your STX February 19 Calls (STX BY) and your STX February 17 Puts (STX NS) for the best prices you can.
Dear Bottarelli Research Member,
Good morning. After the close yesterday, Seagate Technology (STX – NYSE) wowed investors with a net income of $533 million, which completely reversed their loss of $2.82 billion in the year-ago period. In terms of earnings per share, Seagate earned $1.05, which came in well ahead of the $0.65 estimate of Thomson Reuters.
As a result, STX shares are up 10% in pre-market, and I don’t want to let this pop go to waste. Therefore, I’d like to use the opening moments to lock in profits on our earnings strangle.
As you know, we entered the combination of STX February 19 Calls (STX BY) and STX February 17 Puts (STX NS) for a total of $1.15. According to my calculations, the morning pop should allow you to sell both positions for around $1.50, good for a 30.43% gainer. While this pricing calculation is not entirely precise (since I can’t see the option premiums yet), I didn’t want to wait to get this alert out to you. The way this market is behaving, we must continue taking our profits off the table as quickly as possible. Therefore, within the first 30 minutes of trading, go ahead and sell both sides of your STX earnings strangle for the best prices you can.
PLAY: Within the first 30 minutes of trading, sell your STX February 19 Calls (STX BY) and your STX February 17 Puts (STX NS) for the best prices you can.
And as always…
Lock and load!
Sincerely,
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