Next Week in Weeklys – 1/12 – 1/16

Alcoa reports Monday (1/12) after the close. Despite AA having been removed from the Dow Jones Industrial Average many market observers consider AA’s report to be the beginning of earnings season. Personally I think things get going when all the big financials report which begins Wednesday with JP Morgan Chase (JPM) and Wells Fargo (WFC). The three year history for stocks with short dated options available appear in the table below –

Weeklys COrrected

I came across an interesting use of short dated options earlier this week. On Tuesday, with DuPont (DD) trading around 71.10 there was a buyer of over 26,000 DD Jan 23rd 72.00 Calls at 1.06 who sold the same number of DD Jan 16th 74.50 Calls at 0.16 which results in a net cost of 0.90. The goal here is DD not trading over 74.50 on Jan 16th and the stock at levels much higher than 72.90 by Jan 23rd.   What has me scratching my head a little is the expiration dates chosen. When I first saw this trade I assumed that DD reported between January 16th and January 23rd.   Checking the investor relations site it turns out the earnings release for DD is scheduled for January 27th.