Welcome JT. IBM has pretty high expectations but the Aug $110 put/call spread is $5.85 so a 5% move in either direction would put you in the money. If you want to be brave you can save a buck by only covering with July $110 puts, now $2 ($1.25 premium) and I would XXX starting with those (XXX means a trade that I would generally recommend) in case the market collapses between now and earnings if they come down to $1.25 as IBM test $110.
IBM – On the bull side, you could also get fancy and buy the Aug $110s for $2.65 and sell 3/5 the July $65s against them for $1.40 which would lower your basis to $1.50 so you could do a 2:1 spread against the Jul $110 puts so that would be (for example) Buy 12 Aug $110 calls, sell 6 July $110 calls and buy 6 Jul $110 puts. I’ll make this play in the complex spread virtual portfolio but anything more than a $3 move either way should do well and you don’t get killed on a flatline.
CELG – dangerous looking chart, DNA did well and got no respect, options are very pricey. Not for me…
RIMM – congrats Dom! I’m still riding the $230s that I sold for $4.75, hoping this thing calms down sometime this century. I can roll them to the Aug $240s for $8.90 if I absolutely have to but I’m just hoping this thing pins back under $230 by the week’s end.
Into earnings, Ebay is a gamble but long-term, I like them. I have the Oct $35s at .65, now $2.20 and I’ll probably just pull half off the table ahead of earnings and take my chances with the rest. As a new play you could tae the Oct $35s and sell the July $35s, which carry a $1.30 premium at .82 and you can always roll down to sell the Aug $32.50s, now $2.75 should earnings go against you.
GOOG and APPL making me very happy! Especially with that nice morning dip on GOOG that let me dump my caller… As to new plays, I have shifted to a 2:1 Sept $550 calls against Aug $530 puts but, at $32.70, I will likely take some profits off the table too. As a new play I would sell the Aug $550s at $25 against the Sept $570s at $22.80 or the Sept $580s for $18.65 against the Aug $560s for $20 XXX They won’t make you rich but they are unlikely to make you too sorry.
Another GOOG play is to sell the July $570s for $8ish and buy the $550 puts for $10ish and Buy the Aug $570s for $15.40. Buying the $570s on upward mo then selling the $570s and buying the puts either on another rejection at $558 or sometime after a breakout near $560. XXX
