NaughtyPines

WEEK OF 1/4 -- EARNINGS TO PLAY VIA OPTIONS: MON, BBBY, WBA

NYSE:MON   MONSANTO COMPANY
Although I traditionally see earnings season as beginning with the first play in the alphabet             (AA), there are some that occur before AA that I've frequently played. Next week, it's MON, BBBY             , and WBA             . MON announces earnings on 1/6 before market open (look to put on that play before Tuesday NY close); WBA             , 1/7 before market open (put on Wednesday before market close); BBBY             after market close on 1/7 (Thursday).

MON's implied volatility rank is currently 63, has an implied volatility of 31, and a short strangle appears to offer nearly 1.00 in credit ($100 per contract) for a 93/104 short strangle, Jan 15th expiry (currently .97 at the mid price).

BBBY             (rank 49/implied 45) needs to have its implied pop a bit to make it 1.00+ attractive; I generally only like to play these when the implied volatility rank is high (70+) and it's implied is kind of right in the middle of its 52-week range right now.

WBA             (rank 83/implied 41): the 78.5/91.5 Jan 15th short strangle is currently going for 1.05 at the mid price.

I looked at other earnings announcement plays for next week ( CUDA             , FINL             , KBH             , HELE, for example), but none of them look particularly attractive for an options strategy because liquidity is poor on the options end of things and/or the underlying doesn't offer weeklies.

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