Scoping the Earnings Trades

Netflix (NFLX) kicked off the week in the right fashion. Earnings trades don't always come in like expected. In fact, they do less than half the time, so when you get a big winner, you take it. You need big winners to make up for the inevitable losers, and there will be losers. Some are not too bad, and others are a total wipeout of risk capital on a trade. I've exited Netflix now in a profitable position. There is no need to talk about net gain or percentage gains, etc. Trades will always speak for themselves in the end.

I really thought there would be a trade on Biogen Idec (BIIB) for earnings, but I just don't see one that I like. It doesn't help the spread on the options are absolutely horrid. They are so wide, it should be illegal, but that is the nature of a stock from time to time. Options are looking for a move around 4.25%, and I don't see it on the downside. We might see a move initially to that level higher, but the last two reports have been faded, so the trade here might be to play a fade tomorrow if we see a big pop. For now, I'll just watch the reaction....247 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

Read the full story and get access to the Real Money Pro trading floor.

There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.

Already a Subscriber? Please login.

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.