Trade Alert: A 70% Gain and a New Buy

We’re entering a new trade today — but first, we’re collecting profits.

On Tuesday, we placed a 75% protective stop on the last half of our Juniper Networks (NYSE: JNPR) call options. We’d already collected a 56% gain on the first half, and as the rest of the calls climbed, I wanted us to ensure our profit.

Well, today, the stock opened a bit lower than our 75% stop — so we’re grabbing a 70% gain from the second half of this trade.

Overall, we made an average 63% return on Juniper in less than a month.

If your stop wasn’t triggered for any reason, go ahead and sell this position at the market since we’ll no longer be following it.

I’m excited that our system continues to work for us, and I want to know if you feel the same. Please shoot me a note about what gains you made and if you’re still satisfied with the trading process. You can reach me at earningsdrift@banyanhill.com.

Now for our new trade…

Two weeks ago, Activision Blizzard (Nasdaq: ATVI), the video game developer, reported earnings that handily surpassed expectations, sending shares up more than 10%.

That triggered a trade in our Earnings Drift Alert system — and now we have the perfect opportunity to enter it.

See, based on our in-depth research, we know the sweet spot for benefiting from this earnings updrift: We should buy calls two weeks after the earnings report and hold them for about a month and a half.

That’s proven to yield the best results. For example, we held this trade in our backtest last year — and it handed us an overall 30% gain (50% on the first half and 10% on the second).

And within our 10 years of historical data, these trading parameters were met five times. Each time, the stock saw gains. They came in anywhere from 3% to 16% — and call options can certainly magnify those returns.

You might remember that we played another earnings trend for Activision in November, and it didn’t work out for us, handing us a rare 75% loss. That hasn’t shaken my confidence in Activision’s earnings trends — we know trades can’t work out 100% of the time.

And based on our data, this trend could prove to be a nice bang for our buck if we buy call options now. So let’s go ahead and grab the April $45 call options.

Here’s your action to take:

Action to Take
Buy Action to Take
Stock: Activision Blizzard Inc. (ATVI)
Option Type: Call Option
Expiration: Apr-21-2017
Strike Price: $45
Option Symbol: ATVI170421C00045000
Action: Buy to Open
Order Type: Limit Order
Duration: GTC (Good ‘Til Canceled)
Limit Price: $1.60
Trade Deadline: If your order is not filled by my next update, I will update you on the trade.
Note: Do not place a market order. Set the limit order at $1.60.
Once this order is filled, place the following order:
Sell Action to Take
Stock: Activision Blizzard Inc. (ATVI)
Option Type: Call Option
Expiration: Apr-21-2017
Strike Price: $45
Option Symbol: ATVI170421C00045000
Action: Sell to Close Half
Order Type: Limit Order
Duration: GTC (Good ‘Til Canceled)
Limit Price: Whatever nets you a 50% gain.
Trade Deadline: Keep this order open until it is filled or canceled.
Note: This second order will allow us to collect a 50% gain on half of our position in the event that a quick move happens before I can get a trade alert out to you.

That’s all for now.

As always, please let me know if you have any questions about these trades. You can reach me at earningsdrift@banyanhill.com.

Looking to next week … Since my company is holding our annual editorial retreat, where we’ll get to mine our big ideas for the coming year, I won’t have your regular dispatch until the following week. But rest assured that my team and I are constantly watching the portfolio, and we’ll keep you updated if any action is needed.

Until next time, good trading…

Jeff Opdyke
Editor, Earnings Drift Alert