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:
Amazon Options Chain - Stock $125
Buy Feb 110-strike Put for $1.50
Sell Feb 140-strike Call for $1.80
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
AK Steel 7%
Source: Bespoke Investment Group