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Tuesday, November 3, 2015

Visa (V) Earnings Play

Friday, 10/30/2015 (12:48:08 pm, PT)

sell -1 Nov 6, 2015  $76 put at $1.07

Tuesday, 11/3/2015 (6:46:53 am, PT)

buy back my put at $1.00

NET PROFIT:  $3.91

  • Visa reported earnings before the Opening Bell on Monday, 11/2
  • Immediately after the earnings release, the stock dropped to an intraday low of $74.53 (not good)
  • By the end of Monday, 11/2, my short put was ITM (not good)
  • On Monday (11/2) evening, I decided to place a closing order to buy back my put at $1.00 to break even and cover my fees
  • Before the Opening Bell the next morning (Tuesday, 11/3), Visa announced that the company was planning to buy Visa Europe for $18.2 billion and the stock shot up
  • My closing order at $1.00 filled 16 minutes after the Opening Bell on 11/3
  • I could have made a lot more $$$$ if I had left my put option alone
  • My trade would have ended perfectly if Visa's CFO had announced the acquisition during the conference call on Monday (11/2) rather than waiting until the next day!!!!