Today I decided to make 2 after earnings trades on Electronic Arts, EA and Elli Lilly and Company,LLY. Most traders like to use options strategies the day before earnings, but I noticed what I think is some meat on the bone, so I figured I’d try to pick some off.
Electronic Arts Sinks After Reporting Earnings
EA disappointed investors with their earnings of 86 cents a share, investors expected $1.94. Revenue was also a miss, reported at $1.3 billion, instead of $1.8 billion that was expected.
Electronic Arts also lowered its guidance for 2019. Executives warn investors to expect full-year earnings of $3.20 a share on sales of $4.88 billion.
Easy Stock Options Strategies – Short Call Spread on EA
I don’t see anything bullish about EA, so I sold a 90 / 95 call spread using my tastyworks account. I chose the March 15th, 2019 expiration, which has 37 days until expiration. I collected $54.
Eli Lilly Earnings Report
Even though LLY beat on revenues the drug manufacturer, missed fourth quarter earnings. The company reported EPS of $1.33 per share, expectations were $1.36.
They also lowered their future guidance for 2019, from $6.00 per share to around $5.55 a share. Lilly now says to expect revenues to be between $25.1 billion and $25.6 billion instead of $25.3 billion and $25.8 billion in 2019.
Overall, LLY has seen some real upward movement, and I think at this point it may be a little overbought.
Easy Stock Options Strategies – Short Call Spread on LLY
I sold the 120 / 125 call spread, again for March 15th 2019 expiration. For this trade I collected $149. I was surprised to get filled to be honest, but the market wasn’t wide at all.