December 6, 2016  Trade Alert -  Earnings Eagle  Portfolio

Broadcom (AVGO) has exceeded expectations for the last 8 quarters but it does not always go up after announcing.  It announces this Thursday after the close.  The average change after announcing has been 4.5% (about $7.40).  If it fluctuates within this average change number, these spreads should be profitable:

 

BTO 5 AVGO 13Jan17 160 puts (AVGO170113P160)

STO 5 AVGO 09Dec16 160 puts (AVGO161209P160) for a debit of $2.77  (buying a calendar)

 

BTO 5 AVGO 13Jan17 170 calls (AVGO170113C170)

STO 5 AVGO 09Dec16 170 calls (AVGO161209C170) for a debit of $2.67  (buying a calendar)

 

Be prepared to change these price limits by $.05 or more in order to get an execution.

 
Happy trading.

 

Terry