Live: Monday, November 13, 2017

11/13 – 2:55 p.m. New York time

HD analysis posted.

11/13 – 2:40 p.m. New York time

I have updated JD with results.

11/13 – 9:50 a.m. New York time

I have exited JD for a profit and shall update the analysis with results later in the day/

HD’s earnings surprise score remains a bit lower than I like, but high enough to trade using options if I’m of a mind. The bid/ask spread on a directional bull trade is sufficiently low to meet my standards. The non-directional  spread is overly high and so is off the table unless it improves.

None of the potential earnings plays using shares — DKS, ICON, MTSC, NCSM, SBBP, SSYS and VRS — meets my standards, on two grounds: I require that the Zacks score be neutral or bullish (3 or greater) and that the earnings surprise predictor be positive (>0). Only HD meets that standard, and since it qualifies for an options trade, its off the table for shares.

i anticipate no new data from Zacks prior to the closing bell, so the shares prospects are off the table.

11/12 – 10 a.m. New York time

I have one earnings play using options on my prospects list: HD. The likelihood of an upside earnings surprise is great enough to be attractive but not so great as to preclude the possibility of a direction neutral trade.

As of Friday’s close the bid/ask spread is acceptable for the direction-neutral strategy, and way too wide on the bull strategy to meet my standards.

As the metrics presently stand, my best course will be to trade HD as a share-based bullish earnings play. If the Zacks earnings surprise predictor score increases on Monday then I shall consider a directional options play, but only if the bid/ask spread declines from its present 72% down to around 25%, which is my standard for selling option vertical spreads. If the earnings surprise score declines further, then I shall look to the directional-neutral option strategy. It’s all very much up in the air.

For earnings plays using shares, I’m also considering DKS, ICON, MTSC, NCSM, SBBP, SSYS and VRS.

Turning to the full week, my potential earnings plays using options, selected from 196 symbols, are:

sym action earnings date meridian
HD 11/13 11/14 am
EFX 11/14 11/15 xm
CSCO 11/15 11/15 pm
NTAP 11/15 11/15 pm
NTES 11/15 11/15 pm
WMT 11/15 11/16 am
AMAT 11/16 11/16 pm

This is a preliminary screening. I shall no doubt uncover problems and ambiguities as I work through the week.

My earnings plays using shares will be selected from these symbols that have survived preliminary screening.

sym action earnings date meridian
DKS 11/13 11/14 am
HD 11/13 11/14 am
ICON 11/13 11/14 xm
MTSC 11/13 11/13 pm
NCSM 11/13 11/13 pm
SBBP 11/13 11/14 am
SSYS 11/13 11/14 am
VRS 11/13 11/14 am
AUPH 11/14 11/14 pm
MTOR 11/14 11/15 am
REXX 11/14 11/14 pm
WGL 11/14 11/15 xm
YOGA 11/14 11/14 pm
HP 11/15 11/16 am
SFS 11/15 11/15 pm
STNG 11/15 11/16 am
VIAB 11/15 11/16 am
SBLK 11/17 11/20 am
URBN 11/20 11/20 pm

Some have overly wide bid/ask spreads at present, and if those persist they will go no further in my analysis.

By Tim Bovee, Portland, Oregon, November 12-13, 2017


Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

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