Trade Alert: A New Buy to Kick Off Earnings Season

Our system triggered a new trade for us today.

As many of you are likely aware, we are at the beginning of a slew of earnings reports — with more than 20 possible trades coming up for us in just the next seven days.

So please keep paying attention to your inbox during these busy weeks. I don’t want you to miss out on the profit opportunities heading our way.

As for today’s opportunity … this morning, Lam Research Corporation (Nasdaq: LRCX) reported earnings that easily topped analyst expectations. As a result, the stock surged more than 5% this morning.

And I expect that climb to steadily continue over the next couple of months.

In fact, based on our historical research, I know that the best time to own the stock is right after this earnings announcement — and to hold it for about two months.

This scenario came up once during our backtest, and it handed us a 50% gain on the first half and a 27% gain on the second within two months. It also came up five times in our research, with the stock gaining 2%, 8%, 9%, 11% and 16% during that time frame — which can turn into pretty impressive returns with call options.

So let’s get into this trade today and use call options that give us a better bang for our buck.

Here’s your action to take:

Action to Take
Buy Action to Take
Stock: Lam Research Corporation (LRCX)
Option Type: Call Option
Expiration: Jun-16-2017
Strike Price: $135
Option Symbol: LRCX170616C00135000
Action: Buy to Open
Order Type: Limit Order
Duration: GTC (Good ‘Til Canceled)
Limit Price: $5.50
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 $5.50.
Once this order is filled, place the following order:
Sell Action to Take
Stock: Lam Research Corporation (LRCX)
Option Type: Call Option
Expiration: Jun-16-2017
Strike Price: $135
Option Symbol: LRCX170616C00135000
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.

If you have any questions about this trade, you can always reach out to me at earningsdrift@banyanhill.com.

Later this week, I’ll update you on our open positions. Not much has changed since last week though — and remember that you can always view our portfolio at any time on our website by clicking here.

Regards,

Chad Shoop, CMT
Editor, Earnings Drift Alert