Lowe’s Companies Inc. (NYSE: LOW, 58.35) has been building investor portfolio’s in 2014, with share up over 17% year today. The stock has traded in a 52-week range of $44.13-$59.16, having made a new high in Monday’s session.

Lowe’s quarterly earnings report is scheduled for Wednesday morning before market open, with consensus analyst estimates calling for EPS of $0.58 on revenues of $13.55 billion. For the same quarter one year prior, Lowe’s beat analyst estimates by $0.01 with EPS of $0.48 on $12.96 billion in sales.

LOW stock offers no serial options, however, standard November contracts have 3 days left till expiration Friday and are thus trading in the same manner as weeklys would. The LOW Nov 60 Straddle is trading $2.64-$2.82, implying a move of about 4.7%. LOW stock has moved an average of 4.2% over the last 8 quarter son earnings news, with the options market forecasting an above average move for this quarters announcement. LOW stock has rallied on 2 of the past 4 earnings announcements, and 4 of the past 8.

Home Depot (NYSE: HD, 96.95) recently sold off following a strong earnings report, but concerns were raised on the call over litigation costs following the company’s recent data breach where consumer credit card info was infiltrated. It is reasonable to expect Lowe’s to report similarly strong numbers without the associated legal costs, so I will look to play LOW to the long side.

My Trade: Buy the Nov LOW 60-62.5 Call Spread for $0.50
Risk: $50 per 1 Lot
Reward: Up to $200 per 1 Lot
Break-even stock price at expiration: $60.50

This trade is somewhat aggressive due to the fact the strikes are $2.50 wide (remember, these are Nov serial contracts, not weeklys) and this sets up somewhat past the upside measured-move target (about $61.25). However, the trade does have the potential to pay 4:1 on my money and thus offers a favorable risk reward setup.

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

Home Depot (HD) is a retailer that provides a variety of home improvement products and services to both DIY and professional end-users. As of 11:00AM CST the company is currently trading around $98.40 (+0.22%), on the upper end of its 52 week range of 73.96-99.36. The stock is up overall on the year after trading in a tight $4.00 range from January through August. HD is set to report earnings pre-market on 11/18.

Historical earnings data on HD from the last 8 quarters has been largely bullish, with the stock trading higher 7 out of 8 sessions immediately following the EPS release, with an average move over those sessions of 3.2%. The options market is currently implying a move of about $3.50 in the stock by this week’s November expiration, which implies a 3.5% move on earnings, just slightly higher than the recent historical average. Coupled with Home Depot’s bullish tendency to trade higher post-earnings as emphasized above, I will be looking to put on a long position into the earnings release.

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.