AZO Earnings Calendar

Autozone (AZO) is due to have earnings on 5/26/09. Generally I like to have the earnings in the back month, in this case the June expiration cycle. With that in mind I placed a double calendar on 4/20 to hopefully capture some time decay.

4/20 BTO AZO May/Jun 170 CALL $4.45
4/20 BTO AZO May/Jun 155 CALL $4.15

4/29 STC AZO MAY/JUN 170 CALL $5.35
4/29 STC AZO MAY/JUN 155 CALL $4.40

Total profit = 9.75-8.60= $1.15
ROI = 13.37%

This trade worked out primarily from some good timing. IV in the front month dropped several points since I first placed the trade.

AZO Earnings Calendar Exit

Autozone has not stayed flat like I hoped. It has trended higher and ascending triangle has formed. I looked at making adjustments to the trade but it doesn't like I can get a favorable risk to reward. So its time to get out. One of the things that went wrong was the fast moving price action that didn't allow for time decay to work in my favor.

STC 2 AZO Feb/Mar 135 Call for $4.30
for a loss of $110 or 12.8%

AZO Earnings Calendar

Earnings on AutoZone is due out on March 3. Volatility will stay inflated or slightly trend higher the next few weeks, which is perfect for a calendar. My first profit target is 15% and I expect to be completely out of the short position by Feb 17. Breakeven is roughly $130 and $141. If price reaches these points, I will adjust the position.

BTO 2 AZO Feb/Mar 135 Call for $4.85