Trading Eaton Vance Post Earnings
Dragonfly Capital | Nov 20, 2012 01:33AM ET
Eaton Vance (EV), the Mutual Fund Company, reports earning in the morning and where it has options they have spreads wide enough to drive a truck through and total open interest of only about 1,000 contracts across all strikes and expiry’s with 11 traded today.
Translation: you can not play this stock for earnings using options or adequately protect your position, even if you are using your sworn enemies money. But you can be prepared to trade off of the reaction to the report. Take a look at the chart below. The last 5 times it has printed a candle with a Topping Tail, like in the bubbles, which was confirmed by a move lower the following day, it ended up pulling back on average 4.3%. And what kind of candle do we have here today...?
On the other side of the coin there has been a rounded consolidation break out today that could drive towards the target of 32 on a continuation higher. Which way do you play it? Which ever one it gives you in the morning.
Disclaimer: The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Original post
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