Research in Motion (RIMM) is coming out with earnings tonight after the close. Last quarter, I bought a dual calendar spread that worked out very well.
To put it on today, note that the June 75 straddle costs $8 with $1 of intrinsic value. So the market’s best guess is that RIMM will go to 82 or drop to 67 or so. One way would be to sell June 65 puts and buy July or Sep and sell June 80 calls and again buy July or Sep. Look at the post on the Savient Pharma trades for details and profit diagrams. Also, look at the results of the SVNT trades – very important, You can be right and still lose money.
I sold the June 70 calls and bought two July 80 calls for each one sold. That is a bet on good results, with a defined loss if it goes the other way. Just a punt. The dual calendar might be a better way to go.
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