8/10 – 3:20 p.m. New York time
Today I entered a new position on SNAP timed to coincide with an earnings announcement, and exited M above my target.
KSS Analysis
Kohl’s Corp. (KSS)
Update 8/14/2017: KSS’s earnings came in at $1.24 per share, well below the $1.86 expected by the Street. Shares declined by by $4 the session after earnings were published and then immediately moved upward by $3.50 before slipping again to the downside. I exited about $1.20 above the low, at $38.71 per share.
Shares declined by 8.7% over my five-day holding period, or a -637% annual rate. The options position produced a -17.9% loss on debit for a -1,308% annual rate.
KSS had 2.82% score on the Zacks Investment Research earnings surprise predictor, providing before the fact evidence (perhaps) that the trade ought to have been passed.
I would have exited at a $3.35 debit had I done so the session after earnings were published. Continuing to hold added an additional 50 cents to the debit, and I exited at $3.85.
KSS publishes earnings on Thursday before the opening bell.
I shall use options that trade for the last time nine days hence, on Aug. 18.
Implied volatility stands at 48%, which is four times the VIX, a measure of the volatility of the S&P 500 index.
KSS’s IV stands in the 89th percentile of its annual range and at the peak of its most recent broad movement.
M Analysis
Macy’s Inc. (M)
Update 8/10/2017: M whipsawed up then down after earnings were published, recovering a portion of the decline. I exited the roller coaster ride at 29.5% of maximum potential profit.
Shares showed a net declined of -4.1% over my one-day holding period, or a -1,488% annual rate. The options position produced a +41.3% yield on debit for a +15,268% annual rate.
M publishes earnings on Thursday before the opening bell.
I shall use options that trade for the last time nine days hence, on Aug. 18.
Implied volatility stands at 57%, which is 4.7 times the VIX, a measure of the volatility of the S&P 500 index.
M’s IV stands in the peak of its annual range and its most recent broad movement.
Live: Wednesday, Aug. 9, 2017
TRIP Analysis
TripAdvisor Inc. (TRIP)
Update 8/9/2017: TRIP gapped up by $4 immediately after earnings were published, fell by $8 and then recovered by $4, ending up about where it had closed the day before earnings. I exited a bit below target, at $2.48, or 21.3% of maximum potential profit.
Shares showed a net decline of -8.25 over the day I held the position, or a -2,978% annual rate. The options position produced a 27.0% yield on debit for a +9,861% annual rate.
TRIP publishes earnings on Tuesday after the closing bell.
I shall use options that trade for the last time 10 days hence, on Aug. 18.
Implied volatility stands at 55%, which is 5.6 times the VIX, a measure of the volatility of the S&P 500 index.
TRIP’s IV stands in the 96th percentile of its annual range and the 93rd percentile of its most recent broad movement.
FOSL Analysis
Fossil Group Inc. (FOSL)
Update 8/14/2017: FOSL shares fell about $4.50 after reporting earnings at a $0.61 loss per share, below the Street expectation of a $0.39 loss. Shares traded sideways for two sessions, and the fell an additional 50 cents, then traded sideways for an additional two sessions. I exited with shares at $8.31.
Shares declined by 32.5% over my six-day holding period, or a -1,977% annual rate. The options position produced a -49.9% loss on debit for a -3,033% annual rate.
The Zacks Investment Research earnings surprise predictor showed a 200% negative earnings surprise coming. Had I used the ESP as a screen, I would have passed on the trade.
Had I exited the first session after earnings were published, the cost would have been a $3.23 debit, or $0.32 below the $3.55 I paid to get out. It was the decline in the third session after publication that made holding a losing tactic.
FOSL publishes earnings on Wednesday after the closing bell.
I shall use options that trade for the last time 10 days hence, on Aug. 18.
Implied volatility stands at 99%, which is 9.9 times the VIX, a measure of the volatility of the S&P 500 index.
FOSL’s IV stands at the peak of both its annual range and its most recent broad movement.
HTZ Analysis
Hertz Global Holdings Inc. (HTZ)
Update 8/14/2017: HTZ missed earnings estimate by a large margin. The Street expected a 23 cent loss per share; it got a $1.90 loss. The stock price rose (yes, “rose” is correct) by nearly $3 in the session after publication, and continued to rise steadily for the three ensuing days. I exited with shares at $19.50.
Shares rose by 33.1% over my six-day holding period, or a +2,014% annual rate. The options position produced a -41.5% loss on debit for a -2,525% annual rate.
Zacks Investment Research gave HTZ a 1.32% earnings surprise predictor score, probably not enough to warn me off of the trade.
Had I exited in the first trading session after earnings were published, I would have paid a $3.40 premium to exit. As it is, the price of getting out was $4.12, a significant worsening of the loss. In hindsight, an immediate exit was the best strategy.
HTZ publishes earnings on Tuesday after the closing bell.
I shall use options that trade for the last time 10 days hence, on Aug. 18.
Implied volatility stands at 102%, which is 10.3 times the VIX, a measure of the volatility of the S&P 500 index.
HTZ’s IV stands in the 91st percentile of its annual range and the 88th percentile of its most recent broad movement.
Live: Tuesday, Aug. 8, 2017
CBS Analysis
CBS Corp. (CBS)
Update 8/9/2017: CBS whipsawed across a $4 span in two days after earnings were published. I exited at 25.7% of maximum potential profit.
Shares showed a net rise of 0.8% over my two-day holding period, or a +138% annual rate. The options position produced a 34.5% yield on debit for a +6,296% annual rate.
CBS publishes earnings on Monday after the closing bell.
I shall use options that trade for the last time 11 days hence, on Aug. 18.
Implied volatility stands at 31%, which is triple the VIX, a measure of the volatility of the S&P 500 index.
CBS’s IV stands in the 70th percentile of its annual range and the 80th percentile of its most recent broad movement.
KORS Analysis
Michael Kors Holdings Ltd. (KORS)
Update 8/14/2017: KORS shares by $8 after earnings came in at $0.80 per share, above the $0.63 Street number. The stock traded sideways for four subsequent days.
Shares rose by 21.3% over my seven-day holding period, or a +1,112% annual rate. The options position produced a -50.1% loss on debit for a -2,611% annual rate.
I would have paid a debit of $5.23 had I exited the position the session after earnings were published. Waiting cost me an additional $0.84 as I exited for a $6.07 debit. In this case the waiting tactic did not mitigate the loss.
KORS publishes earnings on Monday after the closing bell.
I shall use options that trade for the last time 11 days hence, on Aug. 18.
Implied volatility stands at 47%, which is 4.6 times the VIX, a measure of the volatility of the S&P 500 index.
KORS’ IV stands in the 77th percentile of its annual range and the 96th percentile of its most recent broad movement.
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