We have a huge list of big-name earnings coming up... some heavy hitters! Also if you read the entire blog, there are 3 FREE things I want you to do for me! (see the full list of notable earnings here https://www.earningscalendar.io)
Let's run through the list of them and see what potential levels they could be hitting, for the exact plays I will be discussing and posting these on our live trading group. See the video below as well, I will go over these names and recap what my thoughts are generally on each of the earnings. Remember earnings plays are always risky so ensure to size correctly.
First, up to $NFLX (Netflix Earnings), the COVID savor... for those stuck at home, this company has made your life a bit easier. The content coming out seems to be getting better and better and there isn't a drought of content either which has been keeping everyone engaged. I believe with a really solid earnings and subscription/engagement stats this stock could break out to all-time highs and go past $600 dollars. I would not bet against Netflix at this time, a safer play could be selling the $460 PUTS for Dec 2020, this should pay out a decent premium. Turn it into a Vertical Put for less risk/less collateral but obviously less payout. For the gamblers, take on some lotto $600C if you wish, but I would tend to play the higher probability return of naked $460P.
Next up, $SNAP (Snapchat Inc Earnings), Tiktok vs Snapchat... obviously TikTok is gaining the steam much faster than SNAP could but the stock's performance has been outstanding. The valuation seems fair at the moment so for this stock I am avoiding it, I have some shares in my IRA that I purchased during the COVID drop in the teens but I am not looking to add at the current levels. This stock could be good to strangle (means buying both calls and put) and play both sides as it usually moves quite a bit.
Mr. Elon Musk's ($TSLA, Earnings Report) aka 69 ... 420 .... LOL! He recently changed the price of the Model S to $69,420 dollars. That's about a $2,000 dollar reduction on the price, cutting away at the margins. You may ask why? Well, most businesses do not lower prices unless demand is not staying up to par, or is it that Elon just wants to have fun with his 400B + company? Who knows. Elon is hard to predict and I won't attempt to. I do believe the valuation is VERY FAIR and Elon still has a lot to prove for the valuation to continue to gain momentum. The short squeeze is somewhat over at this point, most shorts have covered their shares as the short interest levels are at an all-time low. I believe the stock will most likely be range-bound but has more downside potential with this earnings report than upside, there aren't going to be any new surprises, and beating the 500K cars delivered number this year is going to be a bit of a challenge still. I am leaning slightly bearish on this earnings report. Vertical Call Credit at the money -$450C/+460C, seems like a reasonable bet.
$KO Earnings Report - Everyone knows what this company is Coca-Cola... let's not spend too much time writing about it. Iron Condor or Short Strangle at $52C and 48P... run that and premium should be straight forward to collect on this name. The safer play is sell the $46P naked.. get a little premium for Dec 2020.. nothing major here to look at.
$IBM International Business Machine Earnings Report - Never really liked this company, it's a dinosaur and Waston isn't helping ... at least I don't think. It looks to be range-bound, so an Iron Condor or Short Strangle is the way to go, see the lines draw, and conclude it for yourself. $116 / $136 are the levels.
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