Bullish Trader Dials In to Coinstar (CSTR) Ahead of Earnings

| February 7, 2013 | 1 Comment More

Coinstar (CSTR) ticks 11 cents higher to $51.43 and a Feb 57.5 – 62.5 call spread is bought on the stock for $1.10, 4500X, to open, ahead of earnings. The company reports after the closing bell. The 57.5 strike is 11.8 percent out-of-the-money and February options expire the week after the company releases results. CSTR has seen average daily post-earnings moves of 8 percent ove the past 8 quarters, including a 13.7 percent rally on Feb 7 a year ago. The Feb 50 straddle trades at 13.7 percent of spot.

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Category: All Stocks, Industrial Goods & Services, Small Cap Stocks

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  1. Kim Klaiman says:

    I think those types of trades are pure gambling. Earnings are 50/50, and placing speculative directional bet has a good chance of losing 100% of the value.

    Check out how we play earnings with non-directional bets – http://www.steadyoptions.com.

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Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.