TXN has an earnings report due out after the close today. Analysts are expecting mediocre returns as net income is expected to fall 24% from $711 million to $541.3. Revenue is expected to fall 2% to $3.39 billion. Texas Instrument chips, which were used in old iPads, will likely be replaced as Apple will design and manufacture their own in Taiwan.
My Trade: Sell the OctWeekly 28-29 Call Spread for $0.50
Risk: $50 per one lot
Reward: $50 per one lot
Break even: $28.50
Revenue has beat estimates for the last three out five quarters, however the last two out ofthree were lower than estimated. Annual revenues dropped around 18% from 2011 to 2012 but it is estimated to continue growing $100 million a year into 2015. The largest open interest position is in the Apr-13 32.5 Call, followed by the Nov 27.5 Put and the Nov 30.0 Call. The Oct ATM Strangle is implying a 9.3% move.
My trade: Buy the Jan STZ 40-45-50 Call Fly for $0.30.
My reward: $4.70
My risk: $0.30
My break even $40.30 and $49.70