Fast Action: Trading Busiest Earnings Week

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

GE Is The Parent Company Of CNBC

For Tim Seymour
Seygem Asset Management Is Short (PBR)

For Joe Terranova
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (CLB)
Virtus Investment Partners Owns More Than 1% Of  (DLR)
Virtus Investment Partners Owns More Than 1% Of  (EXR)
Virtus Investment Partners Owns More Than 1% Of  (IGE)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of  (DBV)
Virtus Investment Partners Owns More Than 1% Of  (UA)
Virtus Investment Partners Owns More Than 1% Of  (XLB)
Virtus Investment Partners Owns More Than 1% Of  (XLI)
Virtus Investment Partners Owns More Than 1% Of  (SKT)

For Brian Stutland
Stutland's Firm Is A Market Maker In VIX Options & Futures, Is Short Volatility
Stutland's Firm Is A Market Maker In S&P 500 Options, Is Long Volatility|
Stutland Owns (EMC)
Stutland Is Short (SPY)

For Brian Kelly
Kanundrum Capital Owns (BAC)
Kanundrum Capital Owns (JPM)
Kanundrum Capital Owns (C)
Kanundrum Capital Owns (ACH)
Kanundrum Capital Owns (GE)
Kanundrum Capital Owns (CNI)
Kanundrum Capital Owns (EWA)
Kanundrum Capital Owns (EWC)
Kanundrum Capital Is Short U.S. Dollars Against Short Euro, Yen, Swiss Francs
Kanundrum Capital Is Long British Pounds Against Short Dollars
Kanundrum Capital Is Long April Gold
Kanundrum Capital Is Short (GS)
Kanundrum Capital Is Short (EWY)

For Peter Schiff
Schiff Owns Gold
Schff Is Short U.S. Dollar

Other Relevant Disclosures:

Seymour Owned (GOOG) On 1/21/10
Terranova Was Short Feb. Crude Oil Futures On 1/11/10
Najarian Owned (HUM) Call Spread On 1/14/10, 1/15/10
Najarian Owned (CLF) On 1/5/10

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