November 14, 2019  Terry’s Tips Trade Alert #5 – Earnings Eagle  Portfolio   

  

HD announces before the close on Tuesday, November 19. The options are pricing in a 3.7% move while the recent post-announcement move has been 1.3%.  This gives us decent odds.  We will commit about $4000 to these trades and place the highest strike spreads first:

 

BTO 2 HD 17Jan20 235 puts (HD200117P235)

STO 2 HD 22Nov19 235 puts (HD191122P235) for a debit of $3.80  (buying a calendar)

 

BTO 2 HD 27Dec19 237.5 calls (HD191227C237.5)

STO 2 HD 22Nov19 237.5 calls (HD191122C237.5) for a debit of $1.77  (buying a calendar)

 

BTO 2 HD 17Jan20 240 calls (HD200117C240)

STO 2 HD 22Nov19 240 calls (HD191122C240) for a debit of $3.00  (buying a calendar)

 

BTO 2 HD 27Dec19 242.5 calls (HD191227C242.5)

STO 2 HD 22Nov19 242.5 calls (HD191122C242.5) for a debit of $1.50  (buying a calendar)

Be prepared to change this (these) price limit(s) by $.05 or more in order to get an execution

 

Happy trading.

Terry