Earnings Trade of the Day 2.28.2012

COST TRADE:

Trade: I sold the COST March 82.50-80 Put Spread and sold the March 87.50-90 Call Spread for $.75 total. 
Profitable: I make money on this trade if COST Closes between $81.75-$88.25 by March 16, 2012.
Break-even: I break-even on this trade if COST Closes at $81.75 or $88.25 by March 16, 2012.
Unprofitable: This trade is unprofitable if COST Closes under $81.75 or above $88.25 by March 16, 2012.  The most I can lose on this trade is the amount this spread can be worth $2.50 minus the amount I sold it for $.75 for a total of $1.75.

UPDATE 2.29.2012 I got filled on this trade yesterday and COST is rallying but not enough for this spread to be worth more than I sold it for.  This spread that I sold for $.75 is worth $.57 good for 24% profit in one day. 

UPDATE 3.1.2012 I will leave this position on until expiration and it is currently worth $.44.

UPDATE 3.2.2012 After not taking my SINA and GPS earnings plays off for profits after earnings, I am bidding $.37 for this spread, good for a double if I get filled.

UPDATE 3.7.2012  This spread is still worth $.75 and I knew it would be worth more if I didnt close it, so now I am leacing it on because if the stock expired today it would be worthless.

FSLR TRADE:

Trade: I sold the FSLR March 40-41 Call Spread for $.24. 
Profitable:
 I make money on this trade if FSLR Closes under $40.24 by March 16, 2012.
Break-even:
 I break-even on this trade if FSLR Closes at $40.24 by March 16, 2012.
Unprofitable:
 This trade is unprofitable if FSLR Closes above $40.24 by March 16, 2012.  The most I can lose on this trade is the amount this spread can be worth $1 minus the amount I sold it for $.24 for a total of $.76.

UPDATE 2.29.2012 I did not get filled on this trade and I am a little upset, because the stock is selling off hard making this spread worthless.  Oh well, on to the next trade, but the thought that it was a winner makes me feel a little better.  On to the next trade.

UPDATE 3.1.2012 With FSLR selling off once again, this spread will expire worthless tomorrow.

UPDATE 3.2.2012 With FSLR selling off once again, this spread will expire worthless today.

UPDATE 3.5.2012 This spread expired to be worthless.  

SODA TRADE:

Trade: I bought the SODA April 35-55 Strangle and sold the March 35-55 Strangle for $1.30 total. 
Profitable: I make money on this trade if SODA closes between $35-$55 and the April volatility does not get crushed too bad.
Break-even: I break-even on this trade if SODA Stangle Swap is worth $1.30.
Unprofitable: This trade is unprofitable if SODA Strangle Swap is worth less than $1.30.  This is a very hard trade to explain, but I basically want to the front month Strangle to be worthless and have April volatility not get crushed, so the April strangle is worth more than $1.30.

UPDATE 2.29.2012 With SODA selling off, but not as much as expected this spread is worth $1.10.  I will leave this trade on, because there is still a 35% skew between April and March volatility, so I think it will flat line, making this trade profitable.  

UPDATE 3.1.2012 With the spread increasing in value everyday closer to expiration, this spread is now worth $1.35.  I will be looking to sell the spread around $1.75.

UPDATE 3.2.2012 I am offering this spread in the book at $1.65 and maybe I will get filled.  The reason I like to put orders in the “spread book” is because it is free advertising, if someone wants to take the other side of the trade.

UPDATE 3.5.2012 I have this spread offered at $1.60 in the spread book, I have teo things working for me, the closer to March expiration the better and the more SODA selld off the better as well.  

UPDATE 3.6.2012 With the stock selling off even more, this spread is worth $1.65 and I am trying to sell it and close it, so I can move to the next trade.



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