Earnings Update - Floor & Decor (FND)
Floor & Decor (FND) is our next covered call position to report earnings tonight after the close. Headed into the event our position is in fantastic shape as the stock is trading marginally above our short strike price.
To refresh, we bought FND stock at 50.35 and sold the February 52.5 Call for $2.50. As of 10 a.m. Eastern time the stock is trading at 54.25, and a close above 52.5 tomorrow on expiration would yield us our full profit of $465 per covered call.
That being said, clearly there is earnings risk as there is the potential for the stock to fall on earnings (stock unchanged or higher is great for us). Here is what the options market is pricing in terms of a potential move tomorrow.
Floor & Decor (FND) earnings today after the close.
With the stock trading at 54.25, the options market is pricing in a move of $4, or 50.25 to the downside and 58.25 to the upside.
The implied move of 7.37% compares to a gain of 0.7% last quarter, a rise of 20% in August of 2019, a decline of of 8% in May 2019, and rise of 2% in February of 2019.
Please note, you will be receiving another email from me tomorrow mid-morning with instructions on how to manage FND and our other positions that are expiring tomorrow (SPLK, FTNT).
And as always, if you have any questions please don’t hesitate to email me.