WFMI’s Pop
Close Earnings Play Now
Dear Bottarelli Research Member,
Good morning. In a surprising move, shares of Whole Foods Market (WFMI – NASDAQ) are popping this morning after reporting a 7% year-over-year sales increase to $2.6 billion. On the news, WFMI is jumping $2.60, as you can see from the chart below.
As you know, we entered the basket of WFMI March 29 Calls (O:WFMI 10C29.00) and WFMI March 27 Puts (O:WFMI 10O27.00) for a total of $2.85. Yesterday, I offered the choice of taking the conservative road and locking in a 12% gain on the entire basket. I also offered a more speculative option of selling the calls and holding the puts (in anticipation of WFMI moving down). And finally, I also mentioned that I would continue following the entire basket for anyone who decided to hold both positions.
As I write this morning, the calls have moved up to $4.70, good for a nice 64% gain on the entire basket. If you are holding both sides, congratulations! Go ahead and lock in these profits now. If you’re holding the puts, go ahead and sell them for basically a break-even proposition. And, if you already closed the play for a 12% gain yesterday, we’ll look to accelerate our profits on our forthcoming plays. All told, close your remaining WFMI position now!
In other position news, our RIMM March 70 Puts (O:RIMM 10O70.00) and our speculative AEM March 55 Puts (O:AEM 10O55.00) are moving our way this morning, so hold both plays for more weakness. And we’re also waiting on ANF to drop lower, which would benefit our ANF March 32 Puts (O:ANF 10O32.00). As always, I’ll keep you fully updated as the trading day progressed. But until then…
Lock and load!
Sincerely,
© 2012 CSR Group, LLC. All rights reserved. Published in USA.
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