NaughtyPines

MON -- 10/6 EARNINGS PLAY

NYSE:MON   MONSANTO CO NEW
MON announces earnings on 10/7 before market open, so you will want to put on a play before the 10/6 NY close to take advantage of the volatility contraction post-10/7 earnings. The stock has been hammered since last earnings, which might lead you to a bullish bias here, in which case you can skew setups to the call side to take advantage of that bias. As usual, though, I'm going neutral ... .

As with the YUM play described below, I would look to use either a short strangle or iron condor to play this particular earnings.

SHORT STRANGLE:

Oct             16th 80/93.5 Short Strangle
Probability of Profit: 75%
Max Profit: $98/contract
Buying Power Effect: Undefined
Break-Evens: 79.02/94.48

IRON CONDOR:

Oct             16th 77/80/93.5/96.5 Iron Condor
Probability of Profit: 71%
Max Profit: $50/contract
Buying Power Effect: $250/contract
Break-Evens: 79.50/94

Look to take these off at 50% max profit ... .

Related Ideas

NaughtyPines
a year ago
Did not get a fill ... . Spreads were awfully wide, and I wasn't going to chase price to get a fill.
Reply
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