Shortly after tomorrow’s opening bell, amusement-park operator Cedar Fair (NYSE: FUN) will report its fourth-quarter and full-year earnings. While I expect these numbers to be solid, you never know how investors will react or what a company might say or announce. Right now, we are sitting on a triple-digit gain, and I don’t want to lose all of that because of a knee-jerk reaction to an earnings blip or an unexpected comment from management. So, I’m sending you your weekly alert a day early with a recommendation to protect your gains against any negativity tomorrow in Cedar Fair’s earnings and conference call.
Here’s what I want you to do…
Action to take: Set a Good ‘Til Canceled limit order at $7.30 to close the FUN June 2015 $45 call option (FUN150619C00045000). At last glance, it was trading at $8.25.
If you get stopped out at $7.30 on negative sentiment, you’ll still pocket a 92% gain on the second half of this position. We already closed out the first half for a 129% gain after just a month, so if this limit order hits — and we go into tomorrow not wanting that to happen! — we are locking in a 110.47% average gain in less than two months.
If the company beats or meets expectations and the stock rises, that’s fantastic. We will continue to ride our gains higher. Either way, I’ll send you a note tomorrow detailing what the company said, and, if necessary, how to adjust your stop-loss to ensure an even plumper profit.
That’s all for now.
Until next time, good trading…
Editor, Precision Profits