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.

Gogo Inc is a holding company. The Company operates through its two operating subsidiaries, Gogo LLC and Aircell Business Aviation Services LLC. The company provides in-flight connectivity and wireless in-cabin digital entertainment solutions. GOGO is currently trading around $16.84 in a 52 week range of $11.66 – 35.77. The company’s stock has been outperforming the NASDAQ this year with shares increasing 1.37% year to date, and shares have traded up 7.54% in the last 3 months.

Back in August, Gogo reported a 25% second quarter revenue increase to $99.5 million as service revenue increased 28% to $79.2 million and equipment revenue increased 17% to $20.4 million year-over-year. The company last released its earnings data on Monday, August 11th. The company reported ($0.22) EPS for the quarter, beating the analysts’ consensus estimate of ($0.23) by $0.01.The Street is projecting a per-share loss of 26 cents for the in-flight wireless provider.

Looking at the earnings history, GOGO has traded bullish 2 of the last 5 quarters. On average, the stock has moved about 9.7% in the last 5 quarters as a result of earnings releases.  This earnings season, market makers are implying about a +- 12% move in the stock for the November monthly option chain. GOGO is currently trading inside the Ichimoku Cloud on the daily chart, and has been oscillating in neutral territory since mid-June.

Tesla Motors, Inc. (TSLA) designs, develops, manufactures and sells electric vehicles and advanced electric vehicle powertrain components.  TSLA is currently trading around $234.80 in a 52 week range of $116.10 – 291.42. The company’s stock has been outperforming the NASDAQ this year with shares increasing 56.03% year to date, however shares have traded down 1.58% in the last 3 months.

Tesla is scheduled to announce Q3 2014 earnings report after market on Wednesday, November 5th.  Analysts’ expect that Tesla will report -$0.01 EPS on a Non-GAAP basis with $889.3 million in total revenue. During the same quarter last year, the company posted $0.12 EPS and $602.6 million in total revenue, considerably coming out ahead of analysts’ expectations. Stifel Nicolaus published a bullish report, upgrading shares to Buy with a $400 price target. The analysts stated that they find it reasonable to see the company achieving a run rate of 1,000 units per week by the end of 2014. Analysts at Goldman Sachs separately said that they believe Tesla will need another $6 billion in capital through 2025.

Looking at the company’s earnings history, TSLA has traded bullish 5 of the last 8 quarters. On average, the stock has moved about 11.9% in the last 8 quarters as a result of earnings releases.  This earnings season, market makers are implying about a +- 9.6% move in the stock for the November 7 option chain. TSLA is currently trading under the Ichimoku Cloud on the daily chart, and has been trading in neutral territory since late March.

Activision, Inc. (Activision Blizzard) is a worldwide publisher of online, personal computer (PC), console, handheld, and mobile interactive entertainment products. ATVI is currently trading around $20 in a 52 week range of $16.06 – 24.18. The company’s stock has been outperforming the NASDAQ this year with shares increasing 4.29% year to date, however shares have traded down 11.57% in the last 3 months.

ATVI will report earnings today, Tuesday, November 4th after the closing bell. According to Zacks Investment Research, based on 3 analysts’ forecasts, the consensus EPS forecast for the quarter is $0.09. The reported EPS for the same quarter last year was $0.07.

Looking at the company’s earnings history, ATVI has traded bullish 5 of the last 8 quarters. On average, the stock has moved about 5.8% in the last 8 quarters as a result of earnings releases.  This earnings season, market makers are implying about a +- 8% move in the stock for the November 7 option chain. ATVI is currently trading under the Ichimoku Cloud on the daily chart, and has been trading in bearish territory since mid-September.

Priceline Group Inc (PCLN), is an online travel company that offers its customers hotel room reservations at over 295,000 hotels worldwide through the Booking.com, priceline.com and Agoda brands. PCLN is currently trading around $1225.45 in a 52 week range of $1017.28-1378.96 . The company’s stock has been outperforming the NASDAQ this year with shares increasing 7.58% year to date, however shares have traded down 1.68% in the last 3 months.

Third-quarter financial results for PCLN will be available at approximately 7:00 a.m. ET on Tuesday, November 4th. Five investment analysts have rated the stock with a hold rating, seventeen have assigned a buy rating and two have assigned a strong buy rating to the company. The average twelve-month target price among brokerages that have updated their coverage on the stock in the last year is $1,426.44. Company guidance is in a range of $19.60 to $21.10. The current Street estimate is $21.14.

Looking at the company’s earnings history, PCLN has traded bullish 7 of the last 8 quarters. On average, the stock has moved about 3.8% in the last 8 quarters as a result of earnings releases.  This earnings season, market makers are implying about a +- 4.7% move in the stock for the November 7 option chain. PCLN is currently trading under the Ichimoku Cloud on the daily chart, oscillating in and out of the cloud for a few most of the current year.

Loews Corporation (L) is a holding company. The company’s subsidiaries are engaged in commercial property and casualty insurance, operation of offshore oil and gas drilling rigs, exploration, production and marketing of natural gas and oil (including condensate and natural gas liquids), interstate transportation and storage of natural gas and operation of hotels. L is currently trading around $43.41 in a 52 week range of $39.38 – 49.05. The company’s stock has been underperforming the NASDAQ this year with shares decreasing 10.02% year to date, however shares have traded up 3% in the last 3 months.

Loews is set to issue its Q3 earnings data on Monday, November 3rd. Analysts expect the company to announce earnings of $0.68 per share for the quarter. Analysts at Deutsche Bank reiterated a “hold” rating on shares of Loews in a research note on Wednesday, October 15th. They now have a $50.00 price target on the stock. On a related note, analysts at Zack’s upgraded shares of Loews from an “underperform” rating to a “neutral” rating in a research note on Thursday, September 4th. They now have a $46.00 price target on the stock.

Looking at the company’s earnings history, L has traded neutral 3 of the last 8 quarters. On average, the stock has moved about 1.5% in the last 8 quarters as a result of earnings releases. This neutral activity might indicate that L will not fluctuate much in price, yet since shares have traded lower this year, there might be some selling pressure after the company reports earnings. This earnings season, market makers are implying about a +-  5.8% move in the stock for the November monthly option chain, which is over 3 weeks away. L is currently trading neutral in the Ichimoku Cloud on the daily chart, oscillating in and out of the cloud for a few months.

LinkedIn Corporation (LinkedIn), is a professional network on the Internet with approximately 277 million members in over 200 countries and territories. LNKD is currently trading around $196.48 in a 52 week range of $136.02 – 242.70. The company’s stock has been underperforming the NASDAQ this year with shares decreasing 9.35% year to date. Shares have traded up 4.93% in the last 3 months.

LinkedIn is scheduled to be posting its Q314 quarterly earnings results at 5PM EDT on Thursday, October 30th. Analysts expect LinkedIn Corp to post earnings of $0.47 per share and company guidance is a range of $543 million to $547 million. Analysts expect an increase of 41.9% year-over-year to $557.49 million. Revenue guidance is currently a range of $2.14 billion to $2.15 billion. Analysts expect 3it to increase to $2.18 billion.

Looking at the company’s earnings history, LNKD has rallied 3 of the last 8 quarters. On average, the stock has moved about 10.1% in the last 8 quarters as a result of earnings releases. This earnings season, market makers are implying about a +-  8.8% move in the stock for the October 31 option chain. LNKD is currently trading neutral in the Ichimoku Cloud on the daily chart.