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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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.