BWLD Reports Earnings Next Week

Buffalo Wild Wings, Inc (BWLD) owns, operates and franchises restaurants offering customers a variety of food and beverage items at nearly 1000 locations in the U.S. The company’s stock is currently trading around $133.90 in a 52 week range of $120.82-$167.64. The stock hasn’t been doing well this year with shares falling over 9% year to date. The company is set to report earnings next week on Oct 27th after the market close.

The stock has rallied 4 of the past 8 quarters with an average move of 8% on earnings day. Currently the options market is implying a move of $12.65 by November expiration. This represents an implied move of around 9.4%. The stock is looking weak below the cloud but is beginning to show signs of life as the stock rallies above the 9 and 6 period moving averages. With stock looking to consolidate and implied moves over historical averages a short premium non directional trade could possibly work out well here.

Trade: Selling the BWLD 120-135-150 Iron Butterfly for $9.40
Risk: $560 per 1 lot
Reward: $940 per 1 lot
Breakeven: $125.60 and $144.40