Gee, can I pull any more out of this trade? I say yes! Here’s what I’ve been thinking…
Take a look at the risk graph below. It shows just the long MAR 200 Put and 240 Call. Theoretically, if I close all the short FEB options and the long MAR 180 Put, I could still pull in several hundred MORE dollars if the stock makes a big move after earnings Wednesday afternoon. Has PCLN done that before? Heck yes – I made a bundle on a straddle in their last earnings. This is not much different although the strikes of the long Call is not positioned well for a big up move. The question is, will PCLN blow away the estimates again, or will the market interpret their earnings as a disappointment? They have been beating estimates and missed only once since FEB of 2003. This should be fun!
Click here for a higher resolution graph.
I still have to work out the details and I will get back to you with my decision. Meanwhile, enjoy your Valentines ♥ Day and for those in the US – yes, Uncle Sam gets another day off at our expense on Monday – Happy Presidents Day!
◄ Jeff ►
