Cirrus Logic (CRUS) is a stock I used to trade in the pits here at CBOE. It’s an audio chip maker and the majority of its business is with Apple (AAPL). CRUS pre-announced better than expected 4Q profits with the official earnings announcement on January 26th. CRUS has mostly traded in the mid-teens this past year but closed at $20.01 yesterday.
So with the pre-announcement has earnings already been factored into the stock? Will too many chips in Apple’s basket put fear into the stock? So with option’s what’s your logic and what’s your trade? A Bear Put Spread? Or maybe Covered Calls with a target sale price to the upside? How about selling the February Straddle at $2.80?
Once again all option strategies are good ones but it comes down to your outlook on the underlying with consideration to price and time.