With the markets being closed for President’s Day I have some free time to clarify the Options Hawk subscription products.

First, any one that has used my service can validate that it is the single best full-service trading product in the market with an options focus.  I provide a complete product ranging from pre-market reports to after-market reports with a live trading chat throughout the day where hundreds of actionable content posts are delivered daily.  I spend hours upon hours on stock research and everything is laid out in a very organized setting on the Trading Hub Member Page.  Details of what MAX Members receive are here http://www.optionshawk.com/services_detail.php

However, my products are not for everyone.  I am not one of these “Options Picking” services that sends out a few picks per day or week.  I am not the be-all and end-all of trading services that requires no work on your part, there are no free lunches.  I see many of these services posting daily on how great of a January 2012 they had, up 60% or whatever, when I also know these same services completely blew-up last July.  These services often only know one trade, long calls, and a 60% gain in January followed by a 40% gain in February is nice until that 80% haircut comes in March, they just do not know any form of risk management nor how to play the market from the short side.

These products are irresponsible, it is impossible to know the trading style or the individual risk profiles of all of your subscribers, yet you are recommending the exact same picks to everyone.  Traders must take responsibility of each of his/her trades, and know the inherent risks associated.

I am also not one of the stock-pickers playing these illiquid sub $10 stocks and day-trading these garbage names for $400 here and $500 there.  That is just not enticing to me, I look for 50%+ gains in days with options, no interest making those little figures.  To each his own, but I’d rather have a sound reason for making a trade then trying to pump-up these penny stocks and taking advantage of market inefficiencies.

I was a game-changer when I launched my service, now it seems everyone has a live trading chat.  However, my chat is 95% me and I filter the rest, only adding actionable content that other users post, to avoid the fluff seen in most chats and now across twitter.  Others can copy the business plan (ask Stock Monster who is now utilizing the exact business plan I created for them 3 years ago, but I never got around to taking legal action), but one thing that cannot be copied is me, (well I’m not sure how far cloning has come along).  I am always coming up with new ideas to enhance the features for members, and after using options flow to find trades for the past 5 years I am as much as an expert as anyone at reading flow.

I focus more on providing the actionable content, and clients can selectively choose trades that best line-up with his/her views, often as simple as “I was liking that name too, and now this gives me further confidence to enter that trade.”  I do run a mock portfolio with the trades I consider the highest probability for success, combining picks from monitoring unusual options action, technical trades, fundamental based trades, and earnings strategy.  It is done very well to say the least, started at $100,000 in June 2009 and now sits at over $2,200,000.  I know that seems unreal, but every trade is tracked and can be found in the archives of the live chats with entry/exit, and I post quarterly results on the website at http://www.optionshawk.com/cms.php?page_name=OptionsHawk_Performance . Yes, there will be some slippage on entry/exit with option spreads, and also does not take into account commissions, but the point is my methods are wildly successful.

I have turned away countless number of prospective subscribers for multiple reasons.  One common reason is they are looking for these Email and/or Twitter picks to be delivered, but I simply do not have time to be able to take my focus away from the Trading Hub, it would be unfair to my paying members.

Second, traders are often seeking that “Golden Ticket” and saying they have $20,000 and ready to trade options.  I simply tell them the account is too small to take on the risk of options and they are better served investing for the long term in high yielding stocks.  This also goes back to the earlier note of not being an “Option-Picking” service.

My services are not for those who are not willing to put the work in to become better traders, and looking to blindly follow picks.  I am also not an educator, that can be found elsewhere on the internet and I know Steve Place does an excellent job at Investing With Options and highly recommend him if looking to learn more on options trading.

The majority of my clients are Hedge Funds and High Net Worth Individuals that are already established as traders.  My service is providing an edge, a method of idea generation to capitalize on high reward/risk ratio trades.  I have a great background in Fundamental Analysis and Technical Analysis, and combining it with my methods of tracking options order flow has been a very successful combination.  Less experienced traders are quickly over-whelmed with the amount of content I provide, and can get frustrated, but my target market wants to see everything I see, so I am generally posting at minimum every 5 minutes.  I excel with customer service, clients have full access to me throughout the day in the chat, although as noted earlier I do not have the time to educate, but can clarify any uncertainties.

I have many clients that have been with my service for more than 2 years, and it is all about knowing how to use it.  I provide in depth Investment Research with a focus on Institutional and Unusual Options Order Flow, and leads my clients and I to names we would not have found simply by looking at charts or P/E ratios, I combine 3 important pillars of trading.

Sometimes I am asked why not just trade, and forget about running a service, which is a fair question and often debated.  My first response is why not do both, a steady flow of income on top of trading profits, and there is plenty of liquidity that sharing picks has little interference on my trades.  Second, and most importantly, is that I like to share.  I share so much free content on Twitter and on my site, and have always been a selfless person that is constantly looking out for others before myself.  However, I also feel that hard work deserves to be rewarded, and hence a subscription service for serious traders looking to gain an edge in the markets.  My work-ethic is unparalleled and it shows in my work.

It may sound unusual coming from a stock-market junkie, but money is not all that important to me, I have everything I need and then some, and the recognition of great work and fame is much more important to me.  I have been published in Bloomberg, Reuters, Dow Jones, Wall Street Journal and countless other global newspapers.  I consider this a nice achievement for having started just 2.5 years ago on an aluminum chair in my room with a laptop and an external monitor, and building up a business that has more than doubled each year.  This has happened without me ever promoting and advertising, just word of mouth really.  If I really wanted to go for it I could easily start up a large company and bring in 10X what I do now, but for now I am comfortable being the small-business, although my mind is full of so many great ideas that I just cannot undertake on my own, I may one day need to look into expanding.

Hopefully this post clarifies what OptionsHawk is and how to best use my products.

I’m not trying to sell anyone, I offer 10 day trials and some find it is the most amazing product in the world, while others are looking for something less intensive, and I completely understand everyone has a different situation.  I have posted many of my testimonials on the Home Page from clients, worth a read if you have not seen.  Also I never really use the Investimonials Site (and have converted to a new twitter handle), but also some reviews on there with 11 at 5-Stars and 1 at 4-Stars http://investimonials.com/twitter/reviews-twitter-optionradar.aspx

I just needed to lay this out today as something I can reference when I receive all these questions, and had the time to get it out today.

One of the toughest concepts for traders is to keep your winners and let them ride, and cut your losers.  This applies to trading options, just as it does with stocks, although options allow more flexibility to adjust positions while winning, or while losing.

Salesforce.com (CRM) shares have made a strong run lately, and a name that I picked up unusually large call buying in well ahead of this run, and have since seen these trades adjusted as shares move higher, so it is a good example to look at.

On January 18th with Salesforce.com (CRM) shares at $107.50 I highlighted very strong action in the February $110 calls with 7,500 bought at the $3.70 to $4.20 range, aggressive offer side buying, a position that amounts to approximately $3,000,000 given the average weighted price of the calls.

On January 19th Salesforce.com (CRM) shares jumped higher from $107 and closed near $115, immediately a big winning trade, shares boosted by a strong earnings report from F-5 (FFIV).  The buyer of the February $110 calls stayed the course and remained long the $110 calls.

On January 23rd with shares still around $115 the trader sold 2,300 of the $110 calls at $9.25 and bought 5,500 of the February $120/$135 call spreads at $3.08, essentially taking $433,500 off the table but initiating a $1,694,000 position.

On January 26th the trader peeled back another 910 February $110 calls at $9.51, netting $865,410.

On February 8th the 5,500 February $120/$135 call spreads were closed at $4.29, chalking up another $665,500 gain.  However, the trader rolled the position out to March $125 calls, bought 7,500X at $6.50 to open, a $4,875,000 position with shares near $122.50.

On February 13th the March $125 calls were sold to close at $12.70 ($9,525,000), a gain of $4,650,000, but once again the trader adjusted the trade, now opening 11,020 March $135/$155 call spreads at $6, a $6,612,000 trade.

The original $3,000,000 investment is still holding around 3,000 of the February $110 calls worth around $6,500,000, while a $6,612,000 position remains open in the March $135/$155 call spreads, and interesting to watch this one with earnings coming up on 2/23 after the close.

This trader caught this move with perfect timing, and has been making all the right moves, so if this large position remains open into earnings, would you really bet against CRM, even with the position being “house money” at this point.

The chart below shows how the trade has caused a major disparity in call to put open interest in March.

I know I should not have been shocked, because these guys on CNBC’s Fast Money are constantly caught in lies, and in the Internet Age it is not very hard to get caught in a bold-faced lie.

Today we can look at Nuance Communications (NUAN), which was set to report earnings after the close, and Dr. J makes comments including:

“Yes, you do buy NUAN into Earnings” , “I own it with OTM Call Options” “I buy Calls or Call Spreads”

On a side note, Cortez was bullish, a major warning sign.

Video is Here: http://video.cnbc.com/gallery/?video=3000072380

No surprise that with shares tanking 12% on earnings, during the 5pm show Dr. J states that there was no reason to own NUAN, and there was not any Institutional Options Action.

The first statement is clearly contradicting what he had said just 4 hours prior, while the second is also a big fat lie, but not everyone would know it.

Today alone NUAN traded 59,500 calls, which is nearly 15X daily action.  Now, an Institutional options trade is generally defined by 250+ contract trades, also taking into account the contract price.  Well, NUAN had a bunch of those trades today and in recent weeks.  Today one trader sold 1,000 February 30/28 put spreads to buy 1,000 February $30 calls.  Another trader bought 1,700 February $28 calls in one lot.

Going back to 1-11-12 there was a buyer of 5,000 February $28 calls at $2.

On 2-2-12  5,500 February $33 calls were bought to open.

On 2-6 a trader bought 3,600 March $35 calls at $0.30.

Furthermore, more than 5,000 April $30 calls in Open Interest from a few big block purchases the past few weeks.

Obviously there was a lot of Institutional paper positioning for upside in NUAN, yet he conveniently states that there was none because he has already seen the outcome.

I can see expecting the viewing public to forget a call you made a week or even days ago, but 4 hours ago…come-on, have a backbone.

Clearly, a lot of paper is going to be in pain tomorrow unless shares find a way to recover.

Disclosure: We were long NUAN Feb. 28 Calls $1.30 and Sold 1/2 at $2.55 and Sold $32 Calls at $0.50 Against Remaining Position to Lock in Gains on Overall Position

Trading options on earnings is a the best way to trade because you do not always have to trade direction, you are also trading the volatility structure, and have the ability to define your reward/risk (commonly referred to as risk/reward, but I have always preferred the reward/risk ratio, just semantics)

Amazon was the big report tonight, and many were trading the options on the earnings.  I had already taken profits on a long straddle from a couple weeks ago that caught the surge in Implied Volatility the past week, and also a February (Weekly)/February $215/$175 double calendar spread opened Monday morning at $1.55 and closed today at $2.30, though it traded above $2.50 into the close and based on Amazon’s projected open, could have been an even bigger gainer.

Into earnings options were pricing in more than an 11% move, simply calculated by taking the at-the-money straddle divided by the stock price, and using the weekly options there is limited residual volatility to factor in.  For a historical view Amazon has only made an 11% or greater move once the past 5 reports, so volatility did appear a bit rich.  Shares are down 8.87% after hours.

So, now for the process:

1) You want to look at the chart to look for the potential support/resistance and magnitude of the move.  A chart has no predictive value into earnings, anyone that tells you otherwise is full of it.  You could flip a coin on whether an earnings move will be up or down and be right just as often as the technician’s view, it is just a guess.  In Amazon’s case there was clear space above $195 for a move back to the $215/$220 area, that was the upside target, while downside would see first support at $185 but do to the likely earnings move support at $173 is the downside target.

2) Into earnings it was safe to assume a minimum of a 5% move, so this gives you an upside starting point at $205 and downside starting point of $184.70, safe to say shares would be above $205 or below $184.70 to start trading tomorrow.

3) Although you can gain an edge with quality research, analysis and channel checks, for simplicity purposes I will say there is an equal probability of a given stock trading higher or lower following earnings.

4) Trade Selection: Knowing the factors above you would want to structure a trade that provides the best reward/risk ratio.  I often like to trade butterfly spreads, in this case with the levels noted above the 185/175/165 put fly in the weekly options priced $1.55 into the close, a profit zone from $166.55 to $183.45, and offering a great reward risk.

My issue is that I saw a lot of traders today in the media and across the web looking at bear call spreads into earnings, one notable one was selling the weekly $205/$210 call spread at a $1.30 credit.

To me this is a dumb trade, risking $370 to make $130, considering an equal possibility of shares going up or down, and the historical and expected move on earnings indicating that an up move likely takes shares past $210 for a max loss on the spread.  If looking to take a bearish trade on AMZN into earnings, why would you choose that strategy instead of something as simple as the weekly $190/$185 put spread at a $2.25 debit.  This trade is risking $225 to make $275 and knowing shares have a high likelihood of being below $185 on a weak earnings reaction.

If wanting to be an option seller instead of a buyer, at least sell the February $190/$195 call vertical at a $2.85 credit, risking $215 to make $285.

Picking the strategy and strikes is a big part of the battle, and entering trades with a reward/risk of less than 1 is not a smart way to trade.

In tracking Institutional and Unusual Options Activity one of the most important things to do is to look for themes.  Often this is seen sector-based, seeing unusual call activity across a group, often seen in Gold Miners, Airlines, Solar, and Home Construction before the groups make a big multi–month run.

Today a theme was seen in the Oil & Gas Exploration and Production sector with 9 different names seeing large complex option spreads (PXP was late yesterday as the 10th).  All of these spreads involved selling downside puts to buy either calls, vertical call spreads, or ratio call spreads.

All of the spreads were Delta Positive, Gamma Negative, Theta Positive, and Vega Negative.

The trades are structured to take advantage of a slow grind higher, as the upside in the ratio spreads is capped before the spreads start to lose money, and lower volatility and the decay with time work to these spreads advantage.

All of the spreads also traded with a large block of stock, and my view is that these spreads are being used as stock replacement strategies, selling puts at a level that is a value you are willing to be long the stock again, while also owning upside exposure for a move higher, the best case scenario being a move higher in which the puts expire worthless and the call spreads have value.

Many of these companies have substantial exposure to Natural Gas, so these positions are effectively calling a bottom as companies cut production to stabilize prices, but also realizing prices have modest upside potential.  M&A could also provide a lift to this group with Foreign Oil very interested in acquiring US Shale Assets and many of these names trading near multi-year lows.

Chesapeake Energy (CHK) could be a name to attract M&A interest, a name that has seen 50,000 January 2013 $35/$45 far OTM call spreads bought at $0.35 to open in the past week.

I prepared an Excel sheet detailing each of the trade, and also one detailing some of the key stats for the names involved in these trades.

Trade Details

The P/L Charts for Each of the Trades:

NFX

XEC

SU

DVN

CRZO

COG

WLL

EOG

PXP

DNR

I personally like CRZO, DVN, and XEC at these levels.  If concerned with ratio spreads for margin purposes, butterfly spreads are another way to play an upside grind in these calls.  A safer route is to utilize bull put spreads in these names, and some may wish to sell puts outright, willing to be long stock, following the Smart Money.

Many ways to trade based off this “intel”, hope it helps you make some money!

Late Addition:

Pioneer Natural Resources (PXD) with a seller of 2,500 March $90 puts to buy 2,500 March $105/$115 call spreads for a net $0.40 credit, similar to what was seen in the other names.

Netflix (NFLX) will report earnings January 25th, 2012 after the close, and Street estimates range from $0.40 EPS to $0.70 EPS with $0.55 the consensus, while Revenues have an $816.6M to $894.6M range with $857.6M the consensus.

Netflix faces a lot of scrutiny into earnings with rising content costs, increased competition, declining customer satisfaction, and weaker subscriber growth numbers, while International expansion is a positive.  The $5.55B Company now trades 22.8X trailing earnings, 1.14 PEG, 1.9X sales and 27.75X cash flow, but expects a 97.3% cut to EPS for FY12, just $0.11.

Analysts are active on both side, Northland Capital noting margin compression and a $50 target in a report today and Wedbush also reiterating Underperform with a $45 Target.  Caris reiterated a Sell last week and $59 target, while B.Riley was positive and raised its target to $125.  Piper reiterated overweight this morning calling 2012 a transition year and has a $100 target for shares.  I have posted a couple reports below:

Netflix shares have fallen sharply each of the last 3 reports, and a 6 quarter average max earnings move of around 17%, although skewed by the 37.5% fall last report, so closer to 13% on average.  The January weekly options are currently pricing in around a 13% move on earnings with January IV at 153%, February at 88.6% and March at 77.17%.

On the NYSE today at 2:57pm, 2,150 NFLX February $97.50 straddles trades at $18.10 to open into earnings, and although the $97.50 calls traded at $7.80 with a $7.55-$7.85 bid-ask and the $97.50 puts traded at $10.30 with a $10.20-$10.40 bid-ask, the position looks to have been initiated as a straddle sale judging from the IV movement.

At 2:55pm the February IV was running at 91.1% and after the trades went through at 3pm February IV has plummeted to 83%, a major intraday IV move in the February contracts that makes me believe this was an opening straddle sale.  A graphical display is below (chart via LiveVol)

This was a $3,891,000 trade that was not tied to stock, and is expecting Netflix shares to stay in the range of $79.40 to $115.60 come February expiration.  It is also making a call that IV is too high into earnings.  Note that being short the straddle into earnings for NFLX was very profitable the prior two quarters before last.

The current IV30 to HV30 ratio is 85%/74%, so just 16.2% higher implied to historical.  Into last quarter this ratio was 87%/86%, the prior 55.4%/37.7% (47.7%higher), and the prior 54.5%/36.4% (49.45% higher).  Based on previous quarters this ratio is more similar to last quarter which would favor being long the straddle into earnings.

Let’s look at the chart to see the range this large money trade expects shares to stay within through February expiration, highlighted in yellow below.  The expectation is that the upside is limited to a gap fill move from last quarter, while downside is limited to a re-test of the breakout move that began on 1/4/12, feeling buyers will step in at that level on weakness.

There are many ways to trade this into earnings, but knowing how the large money is positioned generally influences the way I trade the names.  Knowing this info you could also structure a January/March double calendar at the $115/$80 strikes, or sell an Iron Condor in the February options.

A final note is that more than 10,000 March $100 calls remain in Open Interest, bought on January 4th when this rally in shares began at $2.65 to open, and tweeted to the public, calls that recently hit as high as $15.  The calls are currently at $8.55 and the buyer is holding steady, and will be interesting to see if the position closes into earnings.  The January $105 weekly calls were actively bought today with 4,400 trading as well.

With that in mind it gives a bullish bias on price and a bearish bias in volatility, making the February $105/$120 1X2 Call Spread at around a $1 debit a very interesting bullish trade with a potential high reward (Profit Zone = $106 to $134)

Equinix (EQIX) is one of the nicer weekly charts right now, especially in Tech, as it has outperformed its peers by a wide margin to start 2012.

I have been tracking this one closely because back on May 5th 2011 with shares at $99 a January $110/$130/$145 Butterfly Call Spread traded 9,400X18,800 contracts at a debit of $3.80, currently worth around $4.

With one week until expiration we could see the owner roll this trade out a few months, cash out, or take deliver of shares via the long $110 calls, but it would be quite suspicious if something goes down this week, say a takeover.

The $5.34B data-center Co. trades 42X earnings, 3.5X sales, and 2.64X book, but a strong 40.85% EPS growth outlook, and demand is on the upswing.  Earnings are not until February options expiration.

However, with IBM and F-5 (FFIV) set to report this week, we could see some kind of deal spark shares higher, just a guess.

Either way, it will be interesting to see how this $3.572 million trade goes down…

If you are unaware by now, the solar stocks,and particularly the Chinese solar stocks rallied today on massive stock volume.

What you may not be aware of is that option traders were buying calls in these names right off the opening bell, and call volume and volatility soared, to the point that by 2:30pm most of these positions were up 100% intraday and positions were being rolled up to further out of the money strikes.  I tweeted out the activity very early in the day, and provided the in depth analysis in the live chat to subscribers.

Also, this was Institutional buying, big lots of 2,500+ contracts changing hands, aggressive bullish buys on the offer.

The next question is the why?  Well there are many reasons floating around, but the main reason that is not being talked about is that on February 13th, 2012 the Department of Commerce will make a decision on whether or not to have additional tariffs on Chinese imports of Solar Cells/Equipment.

More Details at Business Week – Bloomberg

Some other reasons being tossed around are a call by Deutsche Bank that the names are oversold, and just a good old fashioned short squeeze in names that are trading at historically low valuations and although many will not survive due to debt burdens, the upside potential brings in the option traders, and the potential for a lot of near term volatility.

I put together a chart of the action and some other stats for these names with today’s trading, wild action for sure and a lot of money to be made scalping these calls intraday:

OCZ Tech (OCZ) will report results on 1/9/12 after the close, and shares have gapped higher each of the last two reports.  It actually posted a 0.03 Loss vs. an Expected 0.03 Gain last report, but FY12 guidance was near the high end.

OCZ is a leading player in solid state drives (SSD) that are replacing hard drives as faster, more reliable, cooler, and utilize less power.

OCZ Tech trades 13.6X earnings, 1.46X sales, 2.9X book and projects $0.56 in earnings next year, after losing $0.70 EPS the last twelve months.  There is a 44.3% short float in shares, 13.85 days to cover.

FBN raised its target to $11 on 12-1, after the Company pre-announced Q3 revenues to be $100-$105M, ahead of $89.4M consensus.

OCZ announced a distribution deal for Ingram Micro (IM) today that boosted shares 7%, also lifted by strong SeaGate (STX) guidance.

On January 5th, 2012 OCZ traded 2,684 calls, more than 2X daily average with 66% of the action bought on the offer, strong bullish action.  Front month, January, IV jumped 18.5 points to 104.07%, which compares to February at 89%.  Traders were actively buying January $7 and $8 calls with 1,082 and 1,176 trading respectively.  The IV Skew shows a strong demand for OTM calls in both January and February, a bullish skew.

The chart sets up great, shares breaking out past trend resistance of a triangle pattern today, major support near $6.50 where there was a Golden Cross of the 50/200 day EMAs, while the 50/200 SMA bullish cross just occurred this week.  Looking at the chart, there is really nothing stopping OCZ from a move back to $10, especially with the short squeeze factor.  The shares also triggered bullish MACD and ADX crossover signals today.

OCZ looks like a great play into earnings, following the hot action, the Jan. 8 calls look attractive at $0.45, note that an earnings directional play is speculative, and willing to lose the full position, but you can get an edge if you do an in depth analysis from every perspective.

Another way to play the volatility is the January/March $9 Calendar Call Spread at $0.40 to $0.45

I have been watching a lot of size trade in Apollo Group (APOL) options recently, and most of the trades have been collars, or other stock-tied trades, so it is tough to take a directional approach into results, but wanted to lay out the full view into earnings.

Apollo is a $6.95B leader in online education and training, and very quietly this much scrutinized industry due to accreditation has traded fairly strong in all tapes.  Apollo trades 15X forward earnings, 1.47X sales, and 9.44X cash flow, cheap on a cash flow basis, but only seeing 5% EPS growth in FY12, so nothing fantastic.  The short float has come down dramatically, now just 8.75% of the float, or 5.44 days to cover.  There has not been a lot of sell-side coverage, on October 20th Wunderlich upgraded shares to Buy with a $63 target, citing the move to a higher quality of enrollment will see earnings growth follow.  Apollo made a $1.4B acquisition of Taminco in December.

The chart is also an interesting view, shares recently with a key breakout above $52 longer term resistance, and now flagging ahead of earnings.  Shares also broke above its 200 week EMA recently and past a trend resistance off the highs going back to 2009 all time highs.  The measured move on the ascending triangle breakout at $52 is to around $70, so overall the chart is bullish in my opinion.

Earnings will be reported 1/5/12 after the close, and Analysts expect $1.18 EPS and $1.16B in revenues.  APOL has beaten EPS expectations each of the last 4 quarters, and shares have average a 14% move in the last 5 reports, 3 times trading higher and twice lower (Max Moves +14.77% and -26.4%).

Apollo January IV stands at 57.1% and February at 46%, a fairly normal skew structure.

Institutional Option Traders have been very active in this name for months, a few of the large trade include:

10/19: Trader Buys 5,000 Jan. 55 Calls $1 and Sells 5,000 Jan. 38 Puts $1.25 – Collar on Short Stock

11/18: Trader Sells 5,000 January $48 Calls, and Sells 2,000 January $36 Puts

11/21: Trader Buys 7,400 January $36 Puts at $0.73 with Long Stock

12/13: 4,500 February $55/$45 Collar on Stock (Sold Calls, Bought Puts at $0.16)

12/28: Buyers active in January $55 Puts ITM (2,360X) and $50 Puts (1,970X)

12/30: Buyer of 5,000 January $60 calls, Sells 10,000 January $48 Puts – Collar on Stock

1/3: Trader Buys Back 5,000 January $55 Short Calls, and Opens 5,000 May $60/$40 Collars on Stock

I really have not put too much thought into ways to trade this one into earnings because the action has been so scattered, and stock-tied trades make it tougher to get a directional read.

Trade Idea 1: The January $55/$50 Strangle at $3.20 Feels “Cheap” Considering Historical Earnings Moves

Trade Idea 2: Buy the January $55/$60 Call Spread at $1.30 – Bullish Trade

Trade Idea 3: Buy the January $55/$50/$45 Put Butterfly Spread at $1.15 – Bearish Trade

My gut says to lean bullish based on chart, fundamentals, and overall feel that traders are getting long stock and collaring with options.