A Look at E-Trade Financial Corp. (ETFC) Earnings

E-Trade Financial Corp. (ETFC) is a financial services company that provides brokerage and related products and services primarily to individual retail investors and provides investor-focused banking products primarily sweet deposits to retail investors. The stock is currently trading around $29.68 at the upper end of its 52 week range of $18.20-$31.48. The stock has been out performing the market this year rallying 22.33% year to date. ETFC is scheduled to report earnings after the closing bell today, and the stock is down $0.52 or 1.71% on the session ahead of the close.

Over the past 12 quarters ETFC has rallied on earnings day 6 times with an average move of 4.40%. The stock appears bullish on a chart going into the release having traded above or in the Ichimoku Cloud since March on the daily bars. Over the past 12 quarters ETFC has rallied from earnings to the nearest options expiration 8 times with an average move of 5.19%. The stock looks as if it could reverse today’s trend and rip to the upside following the recent bullish trend. Investors have heard news of recent increase in assets under management exceeding $50 billion. With bullish technical analysis and great earnings performance in the past it is hard to justify anything, but a long position on ETFC.

The options market is currently implying a move of around $1.18 or 4.0% in ETFC by this Friday’s close giving us targets of $28.5 and $30.86.

Trade: Buy this week’s 30-31.5 Vertical Call spread for $0.32
Risk: $32 per lot
Reward: $118 per lot
Break Even: $30.32