Urban Outfitters, Inc. (URBN) is an apparel and accessories company operating under multiple brands both in brick and mortar stores and online channels. The company’s stock is currently trading around $30.90 in a 52 week range of $29.11-$40.67. The stock has been relatively weak this year with shares falling by 16.77% year to date. The company is set to report earnings Monday afternoon.

The stock has sold off on earnings day 5 of the past 8 quarters with an average move of 4.7%. The options market is currently implying a move of about $1.90 by November expiration. This implies a 6.1% move on earnings, higher than the historical average. Although URBN has a bearish earnings record we have seen other names in the space report solid quarters and perform well since. With mixed metrics surrounding URBN and a larger than normal move being implied I will be looking to get short premium and fade the movement in URBN.

Trade: Selling the URBN Nov 29-31-33 Iron Butterfly for $1.35
Risk: $65 per 1 lot
Reward: $135 per 1 lot
Breakeven: $29.65 and $32.35

Luxury retailer for everyman (and woman) Nordstrom Inc. (NYSE: JWN, $73.37) is scheduled to report earnings after the close of today’s session. JWN shares have been in vogue for investors in 2014, having rallied nearly 19% year to date.

JWN shares have traded in a 52-week range of $54.90-$73.94, having hit a new all time high during last Thursday’s session.

For today’s upcoming earnings report, consensus analyst estimates are calling for EPS of $0.71 on revenues of $3.1 billion. For the same quarter on year prior, Nordstrom reported EPS of $0.69 (beating estimates by $0.03) on $2.88 billion in revenue

JWN offers no weekly options so traders wishing to play catalyst movement must turn to the standard Nov expiration contracts, expiring in 8 days on Friday November 21.

Markets for both the JWN Nov 72.5 and Nov 75 Straddles are about a quarter wide, implying about a 5.7% move in the range of $4.03-$4.31.

Historically, JWN stock has sold off on 3 of the past 4 quarters and 6 of the past 8. Following Macy’s (NYSE: M, $61.73) strong post-earnings performance, KOTM traders are positioning themselves to the long side going int today’s report.

The Trade: Buy the JWN Nov 75-77.5 Call Spread for about $0.70
Risk: $70 per 1 Lot
Reward: up to $180 per 1 Lot
Break-even stock price (at expiration): $75.70

Greeks of this trade
Delta: Long
Gamma: Long
Theta: Short
Vega: Long

Fossil Group (NasDaq: FOSL, 103.82) shares are off by nearly 14% in 2014. The Richardson, TX-based clothing and accessory manufacturer is scheduled to report earnings after the close today.

FOSL stock has recently been trading in the lower part of it’s 52-week range of $91.84-$129.79. Consensus analyst estimates project EPS of $1.82 on revenue of $879.05 million, compared with EPS of $1.36 on $810.4 million in revenues for the same quarter last year.

The FOSL Nov Weekly 103 Straddle is $7.50-$8.40, imply a move of roughly $8 or 7.5% before this Friday’s expiration. This slightly higher than the average post-earnings announcement move of 7% over the past 8 quarters. FOSL stock has sold off on earnings 3 of the past 4 quarters, and only rallied 4 of the past 8 quarters.

When putting on earnings trades, traders should always turn to weekly options if possible to best isolate the catalyst movement. At the same time, if trading a directional strategy, it is very important to ‘spread’ the trade using a vertical. By selling a further-out-of-the-money call or put, one reduces their exposure to a post-earnings ‘vol crush,’ where the volatility component of the option’s extrinsic value rapidly declines due to the removal of the uncertainty of earnings data.

My Trade: Buy the FOSL Nov 101-96 Put Spread for $1.50
Risk: $150 per 1 Lot
Reward: up to $350 Per 1 Lot
Break-even stock price at expiration: $99.50

Greeks of this Trade
Delta: Short
Gamma: Long
Theta: Short
Vega: Long

D.R. Horton, Inc. (DHI) is a U.S. based homebuilder operating in 27 states and closing over 24,000 homes in the last fiscal year. DHI is currently trading around $23.50 (+1.51%) in a 52 week range of $17.67-$25.23. The stock has been underperforming the broader market this year with shares rallying 5.10% year to date. DHI is set to report earnings tomorrow before the opening bell.

DHI has rallied 5 of the past 8 quarters on earnings day with an average move of 8.7%. Market makers are currently implying a move of a round $2.20 (9.4%) by this Friday’s close. DHI is looking strong on the daily chart with shares now trading above the cloud and the future cloud sloping higher. With strong technical and historical earnings movement I am looking for a potential long in DHI.

Trade: Buying the DHI Nov 14th Weekly 24.5-25.5 Call Spreads for $0.25
Risk: $25 per 1 lot
Reward: $75 per 1 lot
Breakeven: $24.75

This trade sets up well at the measured move target and gives a trader a 3-1 reward to risk setup. My exit plan for this trade would be to sell half for a double tomorrow and hold the balance until expiration.

Facebook (Nasdaq: FB, 80.77) is scheduled to report earnings after Tuesday’s closing bell. FB share are up over 26% year to date, with one market commentator saying ‘I’ve never seen a stock want to get to $100 so badly as FB.’ There’s also the much talked about ’80-120 rule,’ which says in a bull market stocks that hit $80 tend to hit $100, and stocks that make it to $100 tend to rally to $120.

Facebook has traded in a 52-week range of $43.55-$81.16, having made a new all-time high earlier in the Tuesday morning session. The FB Oct Weekly 81 Straddle is priced around $5.75, implying a move of about 7.3%. Historically Facebook is strong on earnings – the stock has rallied 3 of the past 4 and 6 of the past 8 quarters. FB stock’s mean move on earnings is 9.7%, more than implied by this week’s straddle.

While some might be wary of social media stocks following Twitter’s earnings, Facebook is a much stronger performer and management will avoid the pitfalls that have plagued their younger cousin. User numbers and monetization of mobile is key, and Facebook has a history of success in both these areas.

My Trade:

Sell the 80-79 Put Spread for $0.45

Risk: $55 Per 1 Lot
Reward: $45 Per 1 Lot
Break-even (at expiration): $79.55

Buffalo Wild Wings, Inc (BWLD) owns, operates and franchises restaurants offering customers a variety of food and beverage items at nearly 1000 locations in the U.S. The company’s stock is currently trading around $133.90 in a 52 week range of $120.82-$167.64. The stock hasn’t been doing well this year with shares falling over 9% year to date. The company is set to report earnings next week on Oct 27th after the market close.

The stock has rallied 4 of the past 8 quarters with an average move of 8% on earnings day. Currently the options market is implying a move of $12.65 by November expiration. This represents an implied move of around 9.4%. The stock is looking weak below the cloud but is beginning to show signs of life as the stock rallies above the 9 and 6 period moving averages. With stock looking to consolidate and implied moves over historical averages a short premium non directional trade could possibly work out well here.

Trade: Selling the BWLD 120-135-150 Iron Butterfly for $9.40
Risk: $560 per 1 lot
Reward: $940 per 1 lot
Breakeven: $125.60 and $144.40

The Goldman Sachs Group, Inc. (GS), is a global investment banking, securities and investment management firm that provides a range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals. GS is currently trading around $178.25 in a 52 week range of $151.33 – 181.13. The company’s stock has been underperforming the market this year with shares increasing .55% year to date. Options traders seem to think that this trend will reverse as order flow in GS has been decidedly bullish during today’s trading session. Today, a trader bought over 5000 GS September 180 Calls for around $1.75. This is an extremely bullish order and involves this trader laying out nearly $1,000,000 in total premium.

Unusual Option Activity:
We define unusual option activity as large block trades that represent a large percentage of daily option volume. The block trade is considered “unusual” if the option volume is above the average daily volume over the past 22 days. At KeeneOnTheMarket.com we scan and analyze order flow from all of the major options exchanges in order to identify any unusual option activity.

Analyzing unusual order flow gives traders a window into what the positions that large institutional players have. The majority of unusual option activity can be traced back to hedge funds, mutual funds, and other large institutions. Knowing where these institutions are placing their bets can be hugely advantageous for any trader. These institutions have informational and technological advantages that the average trader doesn’t have, and the amount of time and analysis that goes into every one of their trades is substantial. We offer this service through our 7 hour daily LIVE trading room http://bit.ly/1usQnKR or through the only Unique Unusual Options Activity Scanner: http://bit.ly/1sCSaws

Order flow can however at times be deceiving. One might logically thing that a large block buyer of calls is bullish on the underlying. This is not always the case. Remember that a large number of participants in the equity options market are hedgers. Long calls are a hedge against short stock, and long puts are a hedge against long stock. With this in mind we have developed a 7 step trading plan that helps filter out unusual option activity that will not provide actionable trade setups. It is by using this plan that we are able to identify the most significant unusual options activity trades every day.

The Trade:
Buying the GS September 180 Calls for $1.75
Risk: $175 per 1 lot

Greeks of this Trade:
Delta: Long
Gamma: Long
Theta: Short
Vega: Long

Burlington Stores, Inc. operates as a retailer of branded apparel products in the United States. The company provides fashion-focused merchandise, such as women’s ready-to-wear apparel, menswear, youth apparel, baby products, footwear, accessories, home goods, and coats. BURL is currently trading around $34.25 in a 52 week range of $21.54-$35.00. The company’s stock has been outperforming the market this year with shares increasing 10.4% year to date. Options traders seem to think that this trend will continue as order flow in BURL has been decidedly bullish during today’s trading session. Today a trader bought over 3000 BURL December 35 Calls for $3.00. This is an extremely bullish order and involves this trader laying out $900,000 in total premium. The stock looks strong today even though it has seen resistance at the $35 level in the past.

Unusual Option Activity:
We define unusual option activity as large block trades that represent a large percentage of daily option volume. The block trade is considered “unusual” if the option volume is above the average daily volume over the past 22 days. At KeeneOnTheMarket.com we scan and analyze order flow from all of the major options exchanges in order to identify any unusual option activity.

Analyzing unusual order flow gives traders a window into what the positions that large institutional players have. The majority of unusual option activity can be traced back to hedge funds, mutual funds, and other large institutions. Knowing where these institutions are placing their bets can be hugely advantageous for any trader. These institutions have informational and technological advantages that the average trader doesn’t have, and the amount of time and analysis that goes into every one of their trades is substantial. We offer this service through our 7 hour daily LIVE trading room http://bit.ly/1usQnKR or through the only Unique Unusual Options Activity Scanner: http://bit.ly/1sCSaws

Order flow can however at times be deceiving. One might logically thing that a large block buyer of calls is bullish on the underlying. This is not always the case. Remember that a large number of participants in the equity options market are hedgers. Long calls are a hedge against short stock, and long puts are a hedge against long stock. With this in mind we have developed a 7 step trading plan that helps filter out unusual option activity that will not provide actionable trade setups. It is by using this plan that we are able to identify the most significant unusual options activity trades every day.

The Trade:
Buying the BURL December 35 Calls for $3.10
Risk: $70 per 1 lot
Targets: Sell 25% at $3.40, Sell 25% at $3.70, Sell 25% at $4.00, Sell 25% at $4.30

Greeks of this Trade:
Delta: Long
Gamma: Long
Theta: Short
Vega: Long

(Full disclosure: I am long Calls in BURL)

Seabridge Gold Inc., a development stage company, together with its subsidiaries, is engaged in the acquisition and exploration of gold properties located in North America. It also explores for copper, silver, and molybdenum ores. SA is currently trading around $11.24 in a 52 week range of $6.65-$17.24. The company’s stock has been outperforming the market this year with shares increasing 62.2% year to date. Options traders seem to think that this trend will continue as order flow in SA has been decidedly bullish during today’s trading session. Today a trader bought over 1000 SA November 14 Calls for $.35. This is an extremely bullish order and involves this trader laying out $35,000 in total premium. The stock looks strong today and might have found a short-term bottom at $6.65.

Unusual Option Activity:
We define unusual option activity as large block trades that represent a large percentage of daily option volume. The block trade is considered “unusual” if the option volume is above the average daily volume over the past 22 days. At KeeneOnTheMarket.com we scan and analyze order flow from all of the major options exchanges in order to identify any unusual option activity.

Analyzing unusual order flow gives traders a window into what the positions that large institutional players have. The majority of unusual option activity can be traced back to hedge funds, mutual funds, and other large institutions. Knowing where these institutions are placing their bets can be hugely advantageous for any trader. These institutions have informational and technological advantages that the average trader doesn’t have, and the amount of time and analysis that goes into every one of their trades is substantial. We offer this service through our 7 hour daily LIVE trading room http://bit.ly/1usQnKR or through the only Unique Unusual Options Activity Scanner: http://bit.ly/1sCSaws

Order flow can however at times be deceiving. One might logically thing that a large block buyer of calls is bullish on the underlying. This is not always the case. Remember that a large number of participants in the equity options market are hedgers. Long calls are a hedge against short stock, and long puts are a hedge against long stock. With this in mind we have developed a 7 step trading plan that helps filter out unusual option activity that will not provide actionable trade setups. It is by using this plan that we are able to identify the most significant unusual options activity trades every day.

The Trade:
Buying the SA November 14 Calls for $.40
Risk: $140 per 1 lot
Targets: Sell 25% at $50, Sell 25% at $.60, Sell 25% at $.75, Sell 25% at $.90

Greeks of this Trade:
Delta: Long
Gamma: Long
Theta: Short
Vega: Long

(Full disclosure: I am long Calls in SA)

Generac Holdings Inc. designs, manufactures, and markets power generation equipment and other engine powered products for the residential, light commercial, industrial, and construction markets in the United States, Canada, and internationally. It offers engines, alternators, transfer switches, and other components fueled by natural gas, liquid propane, gasoline, diesel, and bi-fuel. GNRC is currently trading around $47.21 in a 52 week range of $39.01-$62.50. The company’s stock has been underperforming the market this year with shares decreasing 16.6% year to date. Options traders seem to think that this trend will reverse as order flow in GNRC has been decidedly bullish during today’s trading session. Today a trader bought over 10000 GNRC November 55 Calls for $1.00. This is an extremely bullish order and involves this trader laying out $1,000,000 in total premium. The stock looks strong today and might have found a short-term bottom at $42.

Unusual Option Activity:
We define unusual option activity as large block trades that represent a large percentage of daily option volume. The block trade is considered “unusual” if the option volume is above the average daily volume over the past 22 days. At KeeneOnTheMarket.com we scan and analyze order flow from all of the major options exchanges in order to identify any unusual option activity.

Analyzing unusual order flow gives traders a window into what the positions that large institutional players have. The majority of unusual option activity can be traced back to hedge funds, mutual funds, and other large institutions. Knowing where these institutions are placing their bets can be hugely advantageous for any trader. These institutions have informational and technological advantages that the average trader doesn’t have, and the amount of time and analysis that goes into every one of their trades is substantial. We offer this service through our 7 hour daily LIVE trading room http://bit.ly/1usQnKR or through the only Unique Unusual Options Activity Scanner: http://bit.ly/1sCSaws

Order flow can however at times be deceiving. One might logically thing that a large block buyer of calls is bullish on the underlying. This is not always the case. Remember that a large number of participants in the equity options market are hedgers. Long calls are a hedge against short stock, and long puts are a hedge against long stock. With this in mind we have developed a 7 step trading plan that helps filter out unusual option activity that will not provide actionable trade setups. It is by using this plan that we are able to identify the most significant unusual options activity trades every day.

The Trade:
Buying the GNRC November 55 Calls for $1.00
Risk: $70 per 1 lot
Targets: Sell 25% at $1.10, Sell 25% at $1.25, Sell 25% at $1.50, Sell 25% at $1.75

Greeks of this Trade:
Delta: Long
Gamma: Long
Theta: Short
Vega: Long

(Full disclosure: I am long Calls in GNRC)