Unofficial Earnings Play Update - BMY
Unofficial Earnings Play Update - BMY Hello Smart Option Sellers! Yesterday I offered up an unofficial earnings play on BMY in which we bought a very speculative, very short-term strangle, hoping to capitalize on an explosive move in the stock in either direction. And although BMY beat expectations and offered positive forward guidance, the stock at this moment has not moved far enough either way to produce profitable results on the strangle. Currently, the stock is down (surprise) $1 per share, near the $50.75 level. The strangle was purchased for about $.50 debit, and it currently is worth around $.06 to $.07 per, giving a loss at the moment. In order to see a gain on the trade, we needed the stock to move below $48 or above $53.50. If you entered this trade, my recommendation is to hold onto it at this point as the stock can still certainly move below $48 if its downtrend continues. You have until the close of trading tomorrow to see how it fares. If the stock remains between the two strike prices, both options will expire worthless and disappear from your account. It will be a total loss. If the stock moves below $48 by tomorrow afternoon, you will be able to book a gain on the put option strike. Either way, I will send out a final update tomorrow. As I said in yesterday's alert, making a play on earnings can be a crapshoot, but as long as you keep it cheap and don't bet the house, it can be a fun way to take a stab on an overnight gamble. That's all for now. Contact me here Regards,
Lee Let's Grab That Cash!