November 29, 2016  Trade Alert -  Earnings Eagle  Portfolio

This company has a long record of exceeding estimates and IV for this week’s options is 85 compared to 33 for the 20Jan17 series.  If the post-announcement change is not exorbitant, this combination of trades should be a winner:

 

BTO 5 ULTA 20Jan17 255 puts (ULTA170120P255)

STO 5 ULTA 02Dec16 255 puts (ULTA161202P255) for a debit of $2.88  (buying a calendar)

 

BTO 5 ULTA 20Jan17 265 calls (ULTA170120C265)

STO 5 ULTA 02Dec16 265 calls (ULTA161202C265) for a debit of $3.18  (buying a calendar)

 

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

 
Happy trading.

 

Terry