Aaaargh!!! I’ve been trying to find a trade to post on this board for the last 5+ weeks . . .and just couldnt find anything that I REALLY REALLY liked. Earnings season came and is almost gone and not a trade was posted. In my short career as a trader, I’ve learnt that sometimes the best thing to do is NOTHING. And nothing is what we did for the last 5+ weeks. We had a nice setup w/ our first NYX bearish bet, and made 30% in 1 week. Our second trade SUCKED and it expired worthless, but that was a speculative one, so I really hope none of you bet your portfolio’s on it (I know I clearly stated that you dont). Staying in the options game is critical if you wanna be successful at trading (options), far too many people blow out thier portfolios and thier egos when they first get into the game and that is NOT something we wanna do.
For those of you who know me, you know I absolutely love Garmin (TICKER: grmn). I love thier products (GPS) and I love to trade it often. . .Most of the time when a trader (read as: I) trade(s) a stock frequently, it means he is (read as: I’m) BULLISH on that stock (garmin). When it comes to Garmin I know garmin products, I know they are (Garmin) an industry leader when it comes to handheld & navigation GPS and I can predict w/ pretty good accuracy how thier quarter is going to be (some day I’ll tell you why 
, but until that day comes, relax . . . ).
Garmin is reporting earnings tomorrow (05/02/2007) and I think they are going to have a decent quarter, They will most prob. meet & beat analyst estimates and possibly raise guidance but I dont expect them to have kick butt results like AMAZON (TICKER: amzn) or BAIDU (TICKER: bidu) both companies hit HOME RUNS this past quarter and shareholders rewarded them accordingly (both stocks moved up 20%+ for those of you who arent following)!
I’ve been looking to setup a “long term” position in garmin for a while, and have been sitting on the sidelines simply because I find thier LEAP options to be very pricey. Being the poor trader I am I usually trade in and out of small shorter term positions (profitably) and that is how I’ve traded Garmin! However, I have finally found a nice way to establish a longer term position in Garmin w/ the possibility of a nice 20% (Primary Exit) return in 1 day or 50% (Seconday Exit) in a few months! Either way, it doesnt look like we are goign to lose unless we are (read as: I AM) impatient.
The details of this trade are posted below. Please remember, if you DONT UNDERSTAND a trade, don’t trade it. Remember “Opportunity is INFINITE, and capital is FINITE“, there will always be another trade for another day, but the capital . . . that is LIMITED!
Enough talk, herez the trade . . . WOOHOOOOO! GOOO GARMIN!!!! (Can you feel the stoke? 
)
TICKER: GRMN
PLAY: Poor Kids Calendar Strangle
Reasoning:
1. GRMN announces earnings tomorrow, and I expect there to be MOVEMENT (preferably to the downside).
2. Even if, there is no movement, we can cheaply adjust this trade and profit from it eventually. (Please set aside about $4.00, for adjustment)
3. In the best case scenario, we will be out of this trade by tomorrow (20 – 30% chance of this happening). If not, then we’ll have the advantage of the LONG TERM position in Garmin that I’ve always wanted to establish.
Entry Points:
There are 3 options involved in this trade, and the trade should be executed at once. IF you arent able to execute the entire trade at once, please do not put a debit of anymore than $6.20 into this trade (in other words, when you have established your position in this trade, you should only have spent $6.20 + Commisions OR LESS).
1) BUY the Jan’08 $55 LONG CALL
2) SELL the Jan’08 $65 LONG CALL
3) BUY the Jun’07 $55 LONG PUT
Remember, dont put any more than $6.20 into this trade and keep about $4.00 for adjustment).
Exit Points:
Primay Exit:
Sell the entire spread for a 20% ROI.
Seconday Exit:
We’ll look to sell the winning leg, and adjust the losing leg as required.
Posted by calendarguy 
Posted by optionaddicts 