You are already aware that this coming week is a short one since you are reading this on a Monday and most likely not at work. With the short week comes a smaller earnings calendar, but this is another small but mighty one. Specifically take a look at KORS and ANF which both have average price changes of about 10% in reaction to earning. QIHU which reports Tuesday after the close has had some wild earnings reactions as well.
With serial options available for hundreds of underlying stocks, exchange traded funds (and notes), and indexes there are opportunities to trade very specific outlooks. I came across one of these trades from Monday last week. On Monday JP Morgan Chase & Company (JPM – 54.53) closed at 53.83. There was a put calendar spread executed that day with a JPM May 23rd 55 Put sold for 1.62 and a JPM Jun 27th 55 Put purchased for 2.05 which comes to a net cost of 0.43. Friday JPM closed at 54.53 so the expiring short put from this spread was worth 0.47 while the long JPM Jun 27th Put closed at 1.20. The net result at this point is a gain of 1.15 on the short put that expired and a loss of 0.85 on the open put position. I dug around and did not come across any JPM trades that I thought may be exit or rolling transactions for the short put that expired on Friday so I’m going to assume that the long JPM 27th 55 Put is still an open position and the trade is a running profit of 0.20. I’ll keep an eye out to see if I can catch any trading around with this position.