FAST is not in a very favorable position pps wise for me and perhaps would have to be strangled into earnings with strikes far apart but this is what I came up with using the aforementioned scenario:
$65/$70 Strangle:
I calculated this with FAST at 67.75, it has until Friday to move ITM either way Past Earnings one day moves..........
Right now on 65/70 Strangle: Puts= .55x.60 Calls= .55x.69
So maybe 1.25 total for both sides could be bought
FAST would need a move to 63.75 downside or 71.25 upside Keep in mind this is calculated using theoretical value of premiums as having intrinsic value only
So from current level of 67.75, FAST would need moves: -4.00 / -5.9% or +3.50 / +5.2%
Historically in the past year day after earnings, FAST has not moved more than 5%
1/18 - prior day close $59.41, day after earnings close $60.46 = +1.05 or +1.7%
10/12 - prior day close $53.88, day after earnings close $51.21 = (-2.47) or (-4.6%)
7/13 - prior day close $51.35, day after earnings close $49.22 = (-2.13) or (-4.1%)
4/13 - prior day close $50.64, day after earnings close $51.72 = +1.08 or +2.1%
The one upside it has is that 10.13% of float is short according to "seeking alpha" article:
4. Fastenal Co. (FAST): General Building Materials Industry. Market cap of $9.71B. Earnings to be released on 4/12/11. Put/call ratio has decreased 29.49% over the last two weeks (from 0.78 to 0.55). Short float at 10.13% (equivalent to 16.04 days of average volume), implying the stock is a short squeeze candidate. The stock has gained 34.69% over the last year.
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