LinkedIn Corporation (LNKD) is a professional networking site with 300 million members I countries around the world. The stock is currently trading around $252.85 in a 52 week range of $136.02-$276.18. The stock has been doing relatively well this year with shares rallying over 10% year to date. LNKD is set to report their most recent quarterly earnings today after the bell and it appears that the stock may be setting up well for a long into the report.

LNKD has rallied on earnings day 4 of the past 8 quarters and has rallied more than 10% on earnings day for the past 3 quarters. On average the stock moves around 10.3% on earnings. This time around market makers are implying a move of around $21.00 by tomorrow close which would give us an implied upside target of $273.85. LNKD is technically trading inside the cloud showing neutral price action. Despite the relatively sideways chart the stock has shown strong historical performance on earnings. Using the upside measured move target I want to set up a trade in LNKD.

Potential Trade: Buying the LNKD May 1st Weekly 262.5-272.5-282.5 Call Butterfly for $1.00
Risk: $100 per 1 lot
Reward: $900 per 1 lot
Breakeven: $263.50 and $281.50

This trade sets up with a 9-1 reward to risk ration and profits in a very wide range.

Gilead Sciences, Inc. (GILD) is a biopharmaceutical company with operations in North America, Europe, and Asia. The company’s stock is currently trading around $102.00 in a 52 week range of $74.00-$116.83. GILD is has been relatively strong this year with shares rallying more than 8% year to date. GILD is set to report earnings after the bell tomorrow and appears to be setting up well for a long position.

GILD has a relatively strong record on earnings. Over the past 12 quarters the stock has rallied 7 times on earnings day and has rallied from earnings day to the nearest expiration 8 times. On average, shares of GILD move 3.8% on earnings day. This time around market makers are pricing in a move of $4.75 or 4.7% by this Friday’s close. Using this implied move I can calculate an upside target of $106.75 for GILD.

GILD looks relatively strong on a chart as well. The stock is trading well above the Ichimoku Cloud and the future cloud is sloping higher. With a positive technical setup and strong historical performance I will look to get long GILD ahead of the release.

Trade: Buying the GILD May 1st Weekly 106-107 Call Spreads for $0.30
Risk: $30 per 1 lot
Reward: $70 per 1 lot
Breakeven: $106.30

Twitter, Inc. (TWTR) is currently trading around $51.00 in a 52 week range of $29.51-$55.99. The stock has been doing extremely well this year with shares rallying more than 42% year to date. Despite this strong performance shares of TWTR are looking weak ahead of the release of their most recent quarterly earnings after the bell today. TWTR shares are trading lower by over 1.1% today as investors position themselves for the report.

The weakness in TWTR makes sense as the stock typically sells of on earnings day. Over the past 5 quarters the stock has only managed to rally 2 times on earnings day and has traded lower to the nearest options expiration 3 of 5 times. On average shares of TWTR move around 16.3% on earnings day but this time around market makers are implying a move of around $5.50 b this Friday’s close, pricing in a 10.1% move into TWTR options. TWTR looks strong on a chart but with the bearish historical performance record TWTR has and the move lower on earnings day Facebook shares saw I think it is difficult to justify anything other than a short position in TWTR.

Using the implied move I can calculate a downside target of $45.50 by Friday’s close and look to set up an options trade.

Trade: Buying the TWTR Weekly 47-45 Put Spreads for $0.50
Risk: $50 per 1 lot
Reward: $150 per 1 lot
Breakeven: $46.50

This trade offers a 3-1 reward to risk set up should TWTR close below $45 on Friday’s close.

Apple Inc (AAPL) is set to release their most recent quarterly earnings report today after the bell. Stock is currently trading around $132.70, up nearly 2% today, in a 52 week range of $80.57-$133.60. The stock has been very strong this year with shares rallying nearly 20% year to date. Analysts have high expectations for this quarter’s earnings and market makers are pricing in a move that would represent a new all-time high for AAPL.

Some analysts are expecting AAPL to have sold upwards of 50 million more iPhones, but many believe that AAPL will once again far surpass these estimates. One of the focus points of the conference call will be news on Apple Watch sales. With versions of the watch selling out in a matter of hours on release day expectations for sales are very high. With expectations high and AAPL trading near its all-time highs how can a trader get long without putting too much risk on the table?

Let’s look at a few different options strategies a trader could use. With the options market implying a move of around $7.00 by this Fridays expiration a trader can develop an upside price target around $139.70. Using this target we can look at a few different strategies.

Expecting AAPL flat to higher:

Trade: Selling the May 1st Weekly 133-132 Put Spreads for $0.50
Risk: $50 per 1 lot
Reward: $50 per 1 lot
Breakeven: $132.50

This trade offers a trader even money on AAPL rallying or trading flat after earnings.

Expecting a large move higher

Trade: Buying the AAPL May 1st Weekly 138-140 Call Spreads for $0.50
Risk: $50 per 1 lot
Reward: $150 per 1 lot
Breakeven: $138.50

This trade gives a trader a 3-1 reward to risk ration if AAPL trades above $140 on expiration.

A high reward, low risk trade:

Trade: Buying the AAPL May 1st Weekly 136-140-144 Call Fly for $0.65
Risk: $65 per 1 lot
Reward: $335 per 1 lot
Breakeven: $136.65 and $143.35

This trade has a huge reward to risk ratio but only profits if AAPL falls inside of a range on expiration.

Johnson Controls, Inc (JCI) is currently trading around $53.00 in a 52 week range of $38.60-$53.41. The stock is higher by 3.25% today and touched new 52 week highs on positive earnings news. The stock has been doing well this year with gains approaching 10% year to date. Whats interesting about this action in JCI is that it was very well telegraphed by large options blocks ahead of the release.

The bullish orderflow in JCI began last week when a trader paid $0.45 for 3,005 of the JCI May 52.5 calls. This trade was opened on Apr 16th and open interest in this line grew to over 10,000 contracts ahead of the earnings release. Traders also bought large blocks of the JCI Jul 55 Calls. Last Friday a trader bought over 6,000 of these calls for $0.75. These calls looked weak this morning as JCI showed initial weakness. The stock reversed however and rallied to new 52 week highs making these trades extremely profitable. Let’s break down the traders profit pn each block.

Trade: A trader bought 3,005 JCI May 52.5 Calls for $0.45
Risk: $45 per 1 lot
Reward: Unlimited:
Breakeven: $52.95

These calls traded as high as $1.70 today making this trade an absolute blowout winner, if this trader held this block to the highs they would have profited $375,625 on a $135,000 bet.

Trade: A trader bought 6,512 JCI Jul 55 Calls for $0.75
Risk: $75 per 1 lot
Reward: Unlimited
Breakeven: $55.75

These calls traded as high as $1.70 today meaning if this trader held their position to the highs they would have profited $618,640.

These trades are fantastic examples of why watching orderflow ahead of earnings is important. Both of these trades were absolute blowout winners.

Facebook Inc. (FB) stock is currently trading at $84.25 and is seeing a small bid higher today as shares are trading higher by just over 0.75% on the day. FB stock has been trading in a 52 week range of $54.66-$86.07 and has been relatively strong this year with shares rallying 7.75% year to date. FB is set to report their most recent quarterly earnings after the bell today. It would appear that traders are buying into the release of the report as Fb typically rallies on earnings day.

Over the past 11 quarters FB has rallied on earnings 8 times and on average moves around 9.36% on earnings day. FB stock has also rallied from earnings day to the nearest options expiration 7 of the past 11 quarters. FB is also looking very strong on a chart. The stock is well above the Ichimoku Cloud and well above both of its major moving averages on the cloud. With the options market implying a move of around $4.70 (5.6%) by Friday’s close a move higher would represent a new all-time high for FB.

Using the implied move calculated by the options market a trader can develop an upside target of $88.95 for this Friday. Using that target I can then set up a strategy in the options market.

Possible trade: Buying the FB Apr 24th Weekly 87-89 Call Spreads for $0.55
Risk: $55 per 1 lot
Reward: $145 per 1 lot
Breakeven: $87.55

This trade offers a trader nearly 3-1 reward to risk ratio and a breakeven point well inside the measured move target implied by the options market.

D.R. Horton, Inc (DHI) is a U.S. based home builder that builds and sells homes in states and cities across the country. DHI is currently trading around $28.70 in a 52 week range of $19.29-$29.29. The stock has been doing very well this year with shares rallying nearly 13.7% year to date. The stock looks very strong on a chart and is seeing a rally today of 2.5% ahead of releasing earnings tomorrow morning.

DHI has a very strong historical performance record on earnings. Over the past 12 quarters the stock has rallied 8 times on earnings day. The stock has also moved higher from earnings day to the nearest options expiration 9 times in the past 12 quarters. The stock is looking strong on a chart as well with shares trading well above the Ichimoku Cloud and the future cloud implying a sustained bull trend. With such strong technical and historical setups I would want to get long DHI into earnings.

On average DHI moves 6.57% on earnings day. This time around market makers are implying a move of around $2.05 by this Friday’s expiration. Using this implied move I can calculate an implied upside close for DHI on Friday then use that level as a target for an options trade. With stock at $28.70 that gives me an upside target of $30.75.

Possible trade: Buying the DHI Apr 24th Weekly 30-31 Call Spreads for $0.25
Risk: $25 per 1 lot
Reward: $75 per 1 lot
Breakeven: $30.25

This trade sets up with a 3-1 reward to risk ratio and gives a trader bullish exposure with a limited downside risk.

International Business Machines Corporation (IBM) is technology company that operates five different business segments around the world. IBM stock is currently trading around $164.50 in a 52 week range of $149.52-$196.86. The stock has been relatively sideways this year with shares rallying around 2.5% year to date. IBM is set to report their most recent quarterly earnings today and stock is trading higher ahead of that release despite IBM stock’s dismal historical performance on earnings day.

IBM has sold off on earnings day 9 of the past 12 quarters and has sold off from earnings day to options expiry 10 times in the past 12 quarters. The stock is trading above the cloud on the daily chart but is above a sideways future cloud. On average the stock moves around 3.7% on earning day but ahead of this report market makers are implying a move of around $6.00 (3.6%). With that implied move we can calculate a downside target of $158.50. With such a weak historical performance record I can only look to get short IBM into earnings.

Possible trade: Buying the IBM Apr 24th Weekly 160-157.5 Put Spreads for $0.55
Risk: $55 per 1 lot
Reward: $195 per 1 lot
Breakeven: $159.45

This trade offers a trader nearly 4-1 on their money and has a breakeven above the implied downside target.

Hasbro, Inc. (HAS) offers toys, games, entertainment products and various television and motion picture offerings through a variety of brands. The company’s stock is currently trading around $66.25 in a 52 week range of $48.01-$66.32. Stock has been on a tear this year and is very near to its 52 week highs. HAS has rallied over 20% year to date and is looking like it could add more gains on their most recent quarterly earnings report set to be released on Monday before the market opens.

HAS has an extremely strong historical earnings performance record. Over the past 12 quarters the stock has rallied 9 times on earnings day with an average move of 4.93%. The stock is also very strong on a chart with shares of HAS trading well above the Ichimoku Cloud. The cloud is also strongly upward sloping implying further upside for HAS. Market makers are currently implying a move of around $4.25 by May expiration which gives us an upside target of $70.50 by May expiry. Using this target we can then set up a potential options strategy to get long HAS ahead of earnings.

Trade: Buying the HAS May 67.5-70 Call Spreads for $0.75
Risk: $75 per 1 lot
Reward: $175 per 1 lot
Breakeven: $68.25

This gets a trader long through May with a point of max profit right at the implied target. This trade also offers a trader better than 2-1 on their money.

Officials in the EU have accused Google of placing links for products on its own shopping service above those of it competitors. Officials state that this essentially amounts to abuse of the firm’s market share to give them an unfair advantage over its competitors. The main complaint that officials have is that if Google is purposefully pushing its own results higher search results may not best represent what customers are looking for.

Despite the actions taken by the EU shares of GOOGL are trading higher today. Google Inc (GOOGL) stock is currently trading around $542.00 in a 52 week range of $490.91-$608.91. GOOGL has been relatively sideways this year with shares higher by only 2% on the year. The next quarterly earnings release on April 23rd may provide a catalyst for the stock as it is historically strong on earnings.

GOOGL has rallied 5 of the past 8 quarters with an average move of 4.9%. This time around market makers are implying a move of around $23.00 by next Friday’s close indicating an expected move of 4.2%. If a trader expected GOOGL to rally on earnings how could they trade it? Typically we opt for spreads ahead of earnings as that helps shield the position from the expected drop in implied vol after the event. Using the implied move we can calculate an expected upside target of $565.00 by expiration and then structure a trade around it.

Trade: Buying the GOOGL Apr 24th weekly 555-565-575 Call Fly for $1.10
Risk: $110 per 1 lot
Reward: $1890 per 1 lot
Breakeven: $556.10 and $573.90

This trade profits in a wide range and gives a trader a huge reward to risk setup.