Next week happens to be the business week of the earnings season. Fortunately, the options action could give you a leg up!
According to Brian Stutland of Stutland equities options traders are looking for big moves in at least 3 stocks next week. They are:
Amazon: +/- 9%
EMC: +/- 5%
SanDisk: +/- 11%
Of course it’s important to note that the move could be in either direction.
Stutland suggests gaming it with an options trade in Amazon. Here’s how he says to do it:
The Trade
Amazon Options Chain - Stock $125
Buy Feb 110-strike Put for $1.50
Sell Feb 140-strike Call for $1.80
Possible Outcome
Profits Capped At $140
Profit Above $125
Losses Below $125
Protected Below $110
If you want to play options, that’s great, adds Guy Adami. But I’d play it a little differently. I think Amazon is going down to $106, he says. Wait and buy it there.
In case you’re looking for some other ideas. The team did a little research and found a number of stocks that make big moves on earnings report next week. They follow:
Avg. Absolute % chg on report date
Amazon 12%
SanDisk 12%
VMWare 10%
Yahoo 8%
AK Steel 7%
Apple 6%
Source: Bespoke Investment Group
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Trader disclosure: On January 22nd, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Najarian Owns (CLF) Call Spread; Najarian Owns (GS) Call Spread;; Najarian Owns (INTC) Calls; Najarian Owns (MS), Is Short (MS) Calls; Najarian Owns (XLF) Calls; Najarian Owns (TEVA); Seymour Owns (AAPL); Seymour Owns (BAC); Seymour Owns (FXI); Seymour Owns (INTC); Seymour Owns (INFY); Seymour Owns (SBUX); Terranova Is Short (CMA), (ESS), (CAL); Terranova Owns (BAC), (JPM), (XOM), (FTO), (FCX), (EMC), (AAPL), (DELL), (MSFT), (QCOM); Terranova Owns March Copper Futures
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