GG Earnings: Sell Calls, Hold Puts
Playing a Down-Move
PLAY: Sell your GG April 40 Calls (O:GG 10D40.00) at market, good for the day. Hold your GG April 39 Puts (O:GG 10P39.00).
Dear Bottarelli Research Member,
When it comes to our earnings play on Goldcorp (GG – NYSE), it looks like the smart tactical position is to sell our calls and hold onto our puts. Since the stock can’t seem to rally off their earnings news, it looks like GG is poised to fall to $38.00 and then downward to $35.50. Therefore, in order to turn our earnings play into a winner, we must maximize the returns from our puts. Therefore, let’s dump the calls now and let the puts take us into profitability.
PLAY: Sell your GG April 40 Calls (O:GG 10D40.00) at market, good for the day. Hold your GG April 39 Puts (O:GG 10P39.00).
Since we entered both the calls and the puts for $1.65, selling the calls at $1.40 means that our break-even on the entire position falls at the $1.90 level on the puts. If GG can get any sort of downside pressure, this could be a very achievable target.
As always, I’ll keep you fully updated. Until then…
Lock and load!
Sincerely,
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