Gap, GameStop and Salesforce.com all report earnings after the bell and traders are setting up now in weekly options.
I’m Angela Miles covering Weeklys set to expire this Friday and next Friday.
I’m falling into the Gap to start this report. Some traders are using call spread strategies as an earnings play on GPS. As the stock trades today around $43 there are 43 calls active. The straddle suggests GPS will move 3.5% either up or down.
Gamestop is also very much in play. The stock is trading around $41 and put action is heavy. The most active strikes in put contracts are 37.5, 38 and 41. It’s possible some traders are long the stock and want to purchase puts in the event the stock tumbles on earnings. The straddle is pumped up and predicts a move of around 7%.
Salesforce.com (~$56) could become a force on earnings. The 56 strike straddle suggests a 5.6% move. Last year the straddle priced in around 7%. Out of the money calls are in demand at the 60 strike going into tonight’s earnings. The 49 puts have seen some activity. CRM tends to attract big options trading on earnings.
Next week in earnings its Best Buy on Tuesday and traders are already stepping into to buy calls options contracts in the 29 and 31 lines. A sign they are feeling slightly more bullish than bearish about the retailer.
Among mighty movers this week:
Apple traded to a new high this week. In the options market today traders are still coming for calls. AAPL calls had aggressive action all week. Next week the call buyers persist in the 100 and 101 strikes and 102 strike calls for next week. Although there are fair among put buyers at the 99 strike for next week as well..
Hewlett Packard is still getting some fallout. HPQ reported a revenue surprise and a profit drop. Calls are active this week and next week in the weeklys at the 35.5 and $36 strikes. HPQ popped up $1 as the tech giant reports better than expected sales of tablets and computers.
Tesla still wants to zoom higher and traders are going along for the ride. TSLA is trading $258 and in the options market, traders are rolling positions from this week’s weeklys into next week to the 260 call strike. There is also some put positioning at the 250 put line.
SPX is generating interesting action in the out of the money calls and puts. There are put players all the way down to 1,900 and call buyers in the 2,000 strike. The wide range could be based on the Fed Head Symposium happening this weekend in Jackson Hole. Fed Chair Janet Yellen Delivers her speech Friday.
That’s it for now. Thank you for watching. Twitter: AngieMiles