October 17, 2019  Terrys Tips Trade Alert #4 – Earnings Eagle  Portfolio

     

MSFT announces after the close next Wednesday, October 23.  The average post-earnings change has been 2.4% and the options are pricing in a move of 4.1% which puts the odds in our favor.  These spreads should result in a gain if the change is less than 3%:

 

BTO 1 MSFT 17Jan20 135 put (MSFT200117P135)

STO 1 MSFT 25Oct19 137 put (MSFT191025P137) for a debit of $2.57 (buying a diagonal)

 

BTO 1 MSFT 17Jan20 140 put (MSFT200117P140)

STO 1 MSFT 25Oct19 138 put (MSFT191025P138) for a debit of $4.25 (buying a diagonal)

 

BTO 1 MSFT 17Jan20 140 put (MSFT200117P140)

STO 1 MSFT 25Oct19 140 put (MSFT191025P140) for a debit of $3.40  (buying a calendar)

 

BTO 1 MSFT 17Jan20 140 call (MSFT200117C140)

STO 1 MSFT 25Oct19 140 call (MSFT191025C140) for a debit of $3.42  (buying a calendar)

 

BTO 1 MSFT 17Jan20 140 call (MSFT200117C140)

STO 1 MSFT 25Oct19 142 call (MSFT191025C142) for a debit of $4.31 (buying a diagonal)

 

BTO 1 MSFT 17Jan20 145 call (MSFT200117C145)

STO 1 MSFT 25Oct19 143 call (MSFT191025C143) for a debit of $2.37 (buying a diagonal)

 

BTO 1 MSFT 17Jan20 145 call (MSFT200117C145)

STO 1 MSFT 25Oct19 145 call (MSFT191025C145) for a debit of $2.90  (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

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