There’s a very narrow window for profit making in this market. When such moments present, earnings traders must pounce.
Which name, in particular, should you consider for a whopper of an earnings trade?
This week’s trading opportunity is all about retail.
The moves were huge and entirely unexpected. As a result, pricing of simple put options in advance of the news were way off base.
After the drops, those same options soared several hundred percentage points, offering astute earnings traders massive gains.
Some might think the secret is out.
They would be wrong.
On Monday, Dillard’s (NYSE: DDS) entered the earnings confessional.
Friday, before the news was released, shares of Dillard’s were down some 8%.
Could they fall further? Absolutely.
Before the market opened, Dillard’s reported earnings that missed expectations.
The stock fell another 8%.
This well-telegraphed trade resulted in triple digit gains for those that bought Dillard’s put options before the market closed on Friday.
This week, we’re faced with several more juicy retail-based earnings trades…
One of my favorites is Gap Inc. (NYSE: GPS).
Gap is totally blowing it. Their execution has been all wrong.
Blame El Niño. Filling stores with winter attire during one of the warmest fall seasons on record was a big mistake.
I don’t know about you, but buying polar fleece in 70 degree weather is not my idea of prudent shopping.
Consumers are doing better than they appear, but you still need to give them something they want to buy.
This was the key mistake of almost every apparel retailer in the market, including Gap.
When the company reports earnings results on Thursday, November 19 after the market close, the numbers will likely disappoint.
The play here, then, is with put options bought in advance.
Do that and you could cash the next retail lottery ticket.
Each Monday, I’ll hand you my top earnings trades in the Earnings Player Green Sheet, which includes complete trade details so you can instantly profit with me this week! Stop missing out and take the Earnings Player 14-day trial here.