We just introduced an added bonus to the Premier Membership called Premier Trade Ideas. These are provided to members on top of Premier Alerts, explained here.
On Monday we sent out a Premier Trade Idea on LULU. The stock had a huge earnings push, but was showing signs of wear around the 78 price point. We looked for a quick pull back towards the 75 psychological level, and put on a Butterfly using weekly options to compliment that assumption. The LULU Sep2 72.50/75/77.50 Butterfly to be exact.
We entered the position @ 0.55 debit, and decided to share it with our StockTwits followers here.
Yesterday we exited the position @ 0.83 and decided it was only right to let our StockTwits followers know here.
The end result was a gain of 0.28, translating to a +50.91% return on risk in just three days! Sweet.
We will keep buying Butterflies, Calendars, Diagonals and the likes using weekly options and standard options as long as the volatility environment stays low. Premier Members can expect more goodness like this and the recent INTC Weekly Butterfly. We’ll continue to share a few with our StockTwits fam from time to time, but it’s not fair to paying member to share every trade.
We sent an earnings strategy email out to Earnings Trade Alerts subscribers at 2:17pm EST today. So far the trade is in profitable territory, but there is still a lot of time before the opening bell.
We’ll share our exit details with you tomorrow. For now, here’s what Earnings Trade Alerts subscribers got via email earlier today…
We sent another earnings trade to members before today’s closing bell. Today’s earnings trade was in WYNN. Here’s what members received via email at around 3:00pm EST.
WYNN is the only name on the after market earnings report list that we have interest in trading. It’s the only liquid stock with a liquid options market that offers a nice pre-earnings premium in implied volatility (IV).
We recently told you about a GS Butterfly we entered. The thesis behind entry, chosen legs, etc is explained in the video embedded into this post.
This GS Dec 95/100/105 Butterfly position was entered at 0.70, meaning for every spread entered there is a capital risk of $70 for a max potential reward of $430. Today, the market price on the spread was between 1.45-1.60. We decided to take profits on half of the position in order to recoup the initial capital investment and let the remaining 50% of the position ride for free. Our half position was exited earlier today @ 1.50, a gain of $80 per spread or 114% return on risk!
This was a low probability of success trade entered to skew our high probability portfolio down a bit, so it made since to recoup the initial capital since all the the previous high probability trades in our portfolio have since been exited.
So far we have nailed this trade, and Members are happy with the results. If we peg 100 on Friday, the other half of the position will be closed for a substantial profit on the trade.