Option Block 590: Earnings Straddle Battle - GOOGL, MSFT, SBUX and More

Published: Jan. 27, 2017, 4:58 p.m.

Trading Block: Earnings!

  • Before the bell: Southwest, Caterpillar
  • After the bell: Alphabet, PayPal, E-Trade, Microsoft, Intel
  • GOOGL - $852.70. ATM Straddle: $34, approx. 4%
  • MSFT - $64.05. ATM Straddle: $2.75, approx. 4.3%
  • INTC - $37.6. ATM Straddle: $1.25, approx. 3.3%
  • PAYPAL - $41.52. ATM Straddle: $2.12, approx. 5%
  • SBUX - $58.51. ATM Straddle: $2.20, approx. 3.7%

Odd Block: Calls trade in Kate Spade Co. (KATE), calls trade in Technology SPDR (XLK) and puts trade in JPMorgan Alerian MLP index (AMJ)

Strategy Block: Uncle Mike Tosaw discusses dollar-cost averaging

Mail Block: Questions, comments, polls, and more.

Options #QuestionOfTheWeek: Lots of earnings on the horizon. Which company will outperform their earnings straddle by the largest margin?

  • Alphabet - $GOOGL
  • Microsoft - $MSFT
  • Intel - $INTC
  • Starbucks - $SBUX

Listener questions:

  • Question from Tim Avery - If I choose an advisor that uses options do they traditionally charge higher fees than straight-up equity advisors?
  • Question from Kddidy - I managed to buy 100 NAK Feb 3.00 Puts at .25 when the stock was trading at $3.30. Do you have any idea how this could happen? I am not sure if I should feel lucky or stupid.
  • Question from Yukoner - Are covered calls still a viable strategy in a 401k these days?

Around the Block/This Week in the Market:

  • Jan 26: Jobless Claims, International Trade, New Home Sales
  • Jan 27: Durable Goods, GDP, Consumer Sentiment