Crocs, Inc (CROX) is a manufacturer of men’s and women’s footwear that is sold in more than 90 countries worldwide. The company’s stock is currently trading around $13.05 in a 52 week range of $12.00-$17.95. The stock has been massively underperforming the market this year as it has fallen over 9% year to date. CROX is set to release their quarterly earnings report after the close today. Analysts are expecting earnings per share of $0.17 on revenues of $292 million. CROX has had relatively mixed performance on earnings day over the past 8 quarters having rallied 4 times and sold off 4 times. On average the stock moves 9.7% on earnings day but has sold off over 20% twice in the past 4 quarters. CROX is technically trading in neutral to bearish territory according to the Ichimoku Cloud with the future cloud indicating there can be more downside in store for CROX. With the options market currently implying a move in CROX of $1.30 by November expiration we can calculate a downside target of $11.75. With relatively weak recent earnings day performance and lackluster technical we believe that CROX sets up well for a short ahead of earnings.
Trade: Buying the CROX Dec-Nov 12 Put Spread for $0.10
Risk: $10 per 1 lot
With a calendar spread reward and breakeven levels can only be approximated. There are simply too many variables to take in to consideration.