NaughtyPines

ULTA -- THURSDAY EARNINGS PLAY

NASDAQ:ULTA   ULTA SALON COSMETCS & FRAG INC
The last play I found for next week is ULTA             (IVR/IV 71/48). It announces earnings on Thursday after market close.

The unfortunate thing is that weeklies aren't available, but the Dec             expiry is near enough in time to not be too much of a problem.

Here's the setup, which may need to be tweaked between Monday's open and the announcement:

Dec             18 150/190 short strangle
POP%: ~70%
Max Profit: $275/contract (after hours)
BPE: ~$2762
BE's: 147.25/192.75

Due to the price of the underlying, it may be worthwhile to consider an iron condor, but the setup cuts majorly into your max profit, although it does define your maximum risk and therefore requires less buying power to put on:

Dec             18 140/150/190/200 iron condor
POP%: ~70%
Max Profit: $170/contract
BPE: ~$830/contract
BE's: 148.30/191.70
NaughtyPines
a year ago
Post-earnings, price is knocking at the door of my short call, while the short put is nearing worthless (.08). I'll look to take the put side off at .05 early next week. To avoid the possibility of another unexpected assignment prior to expiration (as occurred with my HD short strangle), I'm going to look at buying a little protection via a long call 2-3 strikes above my current 185 short call (now that I look at it, I actually put on a 145/185 short strangle; oh, were I to have put on the 150/190). Naturally, if Monday brings price substantially off that 185, I'll leave it alone, but keep a close eye on it.
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