October 24, 2017 Trade Alert  -   Honey Badger  Portfolio

YY is a company we featured as one of our IBD Top 50 list plays recently.  Today it is down about $1.50 to $94.50 although the trend is certainly to the upside.  This trade is a little different from our usual play, but it seems like a high-potential one because for some unknown reason, IV for the weekly series 24Nov17 which expires shortly after the scheduled 11/21/17 announcement is about equal to the 17Nov17 series which expires before the announcement date.  At this time, an at-the-money call with a week of remaining life is trading for about $1.50, or about double what should pay for this spread, and when it is in a post-announcement week, it should trade much higher. We will probably not hold the long side until after the announcement.

BTO 15 YY 24Nov17 98 calls (YY171124C98)

STO 15 YY 17Nov17 98 calls (YY171117C98) for a debit of $.70 (buying a calendar)

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

Happy trading.

Terry