The Coca-Cola Company (KO) markets over 500 beverages around the world. The company’s stock is currently trading around $42.00 in a 52 week range of $37.22-$45.00. KO shares have not moved much this year with stock lower on the year by only 0.57%. Despite the lack of movement in KO this year traders have been extremely bullish the name as we have seen many large blocks of calls being bought in KO. Earlier this morning a trader added to a large position in
KO implying they believe there will be more upside in KO.

Earlier this morning a trader bought 13,914 KO May 44 calls for $0.50. This is call volume 7 times the average call volume in KO. Over 25,000 contracts have now traded on that line and will add to the open interest of over 47,000 contracts. Although KO is trading below the cloud on the daily chart this bullish order flow is too large to ignore. Our traders bought these calls along with other bullish options positions in KO.

Trade: I bought the KO May 44 Calls for $0.53
Risk: $53 per 1 lot
Reward: Unlimited
Breakeven: $44.53

SolarCity Corporation (SCTY) is a designer, fabricator and seller of solar energy systems for both residential and commercial building use. At the time of this post (11:15AM CST), SCTY is currently trading at 58.16, up 0.07% on the day. The stock is currently trading well within the lower portion of its 52 week trading range of 45.79-88.35 and has been unable to break above and trade over the 60.00 level resistance since early October 2014. SCTY is scheduled to report earnings today, 2/1/8/2015 after the market close.

Over the last eight quarters of earnings data available, SCTY has traded predominantly bearishly, moving lower on six out of eight sessions immediately following the EPS release. The average historical move during this same time period was approximately 9.2%, although it may be worth noting that four of the stock’s post-EPS directional moves registered over 10%. Currently the options market is pricing in a slightly lower than average move of 7.5% based on the current pricing of the at-the-money straddle. This would imply a directional move of about $4.40 in the price of the underlying stock by this Friday’s monthly options expiration. SCTY remains above the cloud and most relevant moving averages on the daily chart, but the Ichimoku Cloud is firmly downward sloping, and as previously stated the overall investor sentiment over the majority of the past year has been largely bearish. In conjunction with the propensity of SCTY to trade lower after earnings, I will be looking to establish a short position in this name going into this afternoon’s close.

Potential Trade: Buying the SCTY Feb 56-55 Put Spreads for $0.30
Risk: $30 per 1 lot
Reward: $70 per 1 lot
Breakeven: $55.70

Fossil Group, Inc. (FOSL) is a Texas based consumer fashion accessory designer and manufacturer, with a physical retail presence consisting of over 300 brick and mortar standalone locations and over 200 outlet locations worldwide. At the time of this post (12:20PM CST), FOSL is currently trading at 99.19, up 0.77% on the day. The stock is currently well within the lower portion of its 52 week trading range of 91.84-121.89, and although it has managed to remain above key 95.00 level support on a daily chart, FOSL has been unable to maintain any significant upward traction and remains well below the downward sloping Ichimoku Cloud and most of the relevant moving averages.

Over the last eight quarters of earnings data available, FOSL has traded with mixed results, moving higher and lower equally (four out of eight sessions) immediately following the EPS release. The average historical move during this same time period was approximately 7.7%. FOSL has been drawing some bearish options activity today as traders buy put spreads expiring this week. Earlier this morning large blocks of the FOSL Feb 98-91 put spreads were bought indicating that this trader believe FOSL will close below $91 on Friday. The options market is implying a move of around $8.30 by Fridays close which would give us a downside target around $91.15. With the weakness in FOSL’s chart and the bearish order flow we are seeing in the stock today I will be looking to get short FOSL into the close.

Potential Trade: Buying the FOSL Feb 95-91 Put Spreads for $1.00
Risk: $100 per 1 lot
Reward: $300 per 1 lot
Breakeven: $94.00

Domtar Corporation (UFS) is a consumer paper goods manufacturer and distributor based in Montreal, Quebec. At the time of this post (11:00AM CST), UFS is currently trading at 44.87, up 2.87% on the day. The stock is currently within the lower-middle portion of its 52 week trading range of 33.04-57.88, though it has rallied to close higher the last five consecutive sessions since breaking out over the 40.00 resistance level on the daily chart on February 6th.

Earlier today a trader bought 1,189 UFS Apr 45 calls for $1.85. This order represents 19.5 times the average daily options volume in UFS. I bought some of these calls for $1.85 and have already taken a profit target in them at $2.00. UFS stock ripped to session highs as soon as this order hit the tape so there are many ways a trader could have traded it for profit. These calls have already traded as high as $2.15 today making this an extremely profitable trade in a very short amount of time.

Trade: A trader bought 1,189 UFS Apr 45 calls for $1.85
Risk: $185 per 1 lot
Reward: Unlimited
Breakeven: $46.85

Starwood Hotels & Resorts Worldwide Inc. (HOT) is a Connecticut based hotel and travel-lodging provider that operates well known international brands such as the Westin, W, Sheraton and Aloft hotel chains. At the time of this post (1:30PM CST), HOT is currently trading at 71.12, down 0.75% on the day. The stock is currently well within the lower portion of its 52 week trading range of 68.53-86.11, and has remained in a sharp downtrend for the greater part of 2015. HOT is scheduled to report earnings tomorrow, 2/10/2015 before the opening bell.

Over the last eight quarters of earnings data available, HOT has traded predominantly bearishly, moving lower on five out of eight sessions immediately following the EPS release. The average historical move during this same time period was approximately 3.5%. Currently the options market is pricing in a slightly larger than average move of around 5.33% by this Friday’s weekly options expiration, which would imply a directional move of about $3.80 in the price of the underlying stock over the course of the next four trading days. HOT remains in bearish territory on the daily chart as mentioned above, and the stock is well under the downward sloping Ichimoku cloud and all relevant moving averages as well, further solidifying the bearish case for this name. In conjunction with the stock’s propensity to sell off following earnings, I am currently leaning bearish HOT and will be looking to establish a short position going into the close of trading today.

Potential Trade: Buying the HOT Feb 70-65 Put Spreads for $1.00
Risk: $100 per 1 lot
Reward: $400 per 1 lot
Breakeven: $69.00

Twitter, Inc. (TWTR) is a San Francisco based social media and networking platform that allows users to post and exchange short messages in real-time. At the time of this writing, TWTR is currently trading at 42.06, up 3.29% on the day. The stock opened with a large gap up today on news that Google will now be including relevant Twitter “tweets” in the results yielded by its ubiquitous search engine. This potential increased visibility for Twitter was met with a largely bullish reaction, though the stock is currently trading off the intraday highs just under 42.50. On a daily chart, TWTR is trading within the lower-middle portion of its 52 week range of 29.51-58.98. The stock has been range-bound for the last several months, but that could be changing in short order with today’s gap higher and fourth quarter earnings scheduled for after the closing bell today, 2/5/2015.

TWTR has sold off on earnings day 3 of the past 4 quarters with an average move of 15.6%. Currently the options market is implying a move in TWTR of about $5.00 by tomorrow’s close. That would give us a downside target around $36.50 by the bell tomorrow. With TWTR showing weak historical earnings performance and the stock trading inside the cloud I will be looking to get short TWTR ahead of earnings.

Potential Trade: Buying the TWTR Feb 6th Weekly 38-36 Put Spreads for $0.50
Risk: $50 per 1 lot
Reward: $150 per 1 lot
Breakeven: $37.50

United Continental Holdings, Inc. (UAL) is a Chicago based airline corporation that provides both passenger and freight transportation services under the United Airlines brand. At the time of this post (1:00PM CST), UAL is currently trading at 68.15, down 1.76% on the session. The stock is currently well within the upper portion of its 52 week trading range of 36.65-74.52, and has remained in a notably strong uptrend since mid-October, after testing and holding the 40.00 support level on a daily chart.

Although the stock is lower today it has made a large swing off of its lows of the day. UAL traded as low as $65.74 this morning. Earlier this morning a trader bought 2,272 UAL Feb 70 calls for $1.65. Later in the session another trader bought 1,000 of these same calls for $3.03 as the stock rallied higher. If a trader would have taken the first order tht came across the tape they would have been able to net huge profits in these calls. Even though the markets are volatile unusual options activity still provides opportunity.

Trade: A Trader bought 2,272 UAL Feb 70 calls for $1.65
Risk: $165 per 1 lot
Reward: Unlimtied
Breakeven: $71.65

Exxon Mobil Corporation (XOM) is a Texas based oil and natural gas producer and currently the largest oil and gas company in the world by total market capitalization. As of the time of this post (12:10PM CST), XOM is currently trading 86.91, down 0.77% on the day. The stock is continuing to press the 52 week lows just over 86.00 as crude oil futures continue their downward slide and weigh heavily on the stock prices of most related companies. XOM is scheduled to report earnings this coming Monday, 2/2/2015 before the market open.

Over the last eight quarters of earnings data available, XOM has traded with mixed results, moving higher and lower evenly, four out of eight sessions immediately following the EPS release. The average historical move during this same time period was 1.5%. Currently the options market is pricing in a slightly lower than average move of approximately 0.91% based on the current pricing of the at-the-money straddle. This would imply a directional move of about 0.80 in the underlying stock by next Friday’s weekly options expiration. On a technical basis, XOM continues to look extremely weak, well below the downward sloping Ichimoku Cloud and all relevant moving averages on a daily chart. The stock continues to lack any significant buying pressure, and looks to remain bearish in the near term as long as crude oil prices continue their extended decline. For these reasons, I am heavily leaning bearish this name going into earnings, and will be looking to establish a short position before this afternoon’s close.

Potential Trade: Buying the XOM Feb 6th Weekly 84.5-83.5 Put Spreads for $0.30
Risk: $30 per 1 lot
Reward: $70 per 1 lot
Breakeven: $84.20

Amazon.com Inc. (AMZN) is a Seattle based e-commerce retailer and distributor, with additional market presence in online web services and digital content distribution. As of the time of this post (11:45 AM CST), AMZN is currently trading at 303.87, nearly flat on the day. The stock is currently trading firmly within the lower portion of its 52 week trading range of 284-406.25, and has remained in this relatively bearish consolidation area for most of the past year. The company is scheduled to report earnings today, 1/29/2015 after the market close.

Over the last eight quarters of earnings data available, AMZN has traded mostly bearishly, moving lower on five out eight sessions immediately following the EPS release. The average historical move during this same time period has been 7.9%, however it may be worth noting that AMZN has sold off after each of the last four consecutive earnings reports, posting an average move during this time period of -9.8%. Currently the options market is pricing in a slightly lower than average implied move of approximately 7.54% in the underlying stock based on the pricing of the at-the-money straddle, which would represent about a $23.00 change in the stock price by tomorrow’s weekly options expiration. On a technical basis, AMZN is currently trading below the downward sloping Ichimoku Cloud and between most of the relevant moving averages. In conjunction with AMZN’s recent tendency to sell off after earnings, I am definitely leaning bearish this name and will be looking to establish a short position before this afternoon’s report.

Potential Trade: Buying the AMZN Jan 30th Weekly 290-280 Put Spreads for $2.40
Risk: $240 per 1 lot
Reward: $760 per 1 lot
Breakeven: $287.60

Alibaba Group Holding Limited (BABA) is the ADR for Chinese e-commerce conglomerate Alibaba Group, the largest e-commerce company in the world. At the time of this post (12:30PM CST), BABA is currently trading at 100.37, down 2.49% on the day. The stock is currently trading near the middle of its post-IPO trading range of 82.81-120.00 after the stock debuted on the NYSE in late September. BABA is scheduled to report earnings tomorrow, 1/29/2015 before the market open.

Last quarter’s earnings report was the first and only on BABA’s record, so while the data is limited, it can be noted that the stock traded higher immediately after last quarter’s EPS, making a move up of 4.2% in the session immediately following the data release. The options market is currently pricing in a larger move of about 7.31% following tomorrow’s announcement, which would represent nearly an equivalent dollar-value move in the stock by this Friday’s weekly options expiration. BABA is currently trading just inside the Ichimoku cloud on a daily chart, and is holding above key 100 level support after initially trading lower in today’s early session. With some of the recent momentum we’ve seen in technology names after earnings, and after witnessing the bullish investor reaction to last quarter’s BABA EPS release, I will be looking to establish a long position in this name going into this afternoon’s close.

Potential Trade: Buying the BABA Jan 30th Weekly 104-106 Call Spreads for $0.55
Risk: $55 per 1 lot
Reward: $145 per 1 lot
Breakeven: $104.55