What I’m doing with Sandisk into tonight’s report…

Sandisk is tonight and as I’d noted yesterday in a post here, I’ve been seeing some concerns from the sellside analysts heading into the report.  And that, frankly, is a much better set up for the bulls than if they’d been sending a bunch of reports full of reasons why the stock will pop tomorrow.

Trading options before an earnings report is one of the highest risk strategy you can employ in trading stocks.  Let’s keep it real.  But that doesn’t mean that we shouldn’t sometimes put a little capital into a pre-earnings trade when the risk/reward on that when the pitch looks attractive.

I’m nibbling on some Sandisk calls into the report tonight.  I’m going out to October so that even if the stock doesn’t respond well tomorrow that I’ll still have some time value (granted if the stock tanks those calls will be crushed too).

And again, this is very high risk.  You might have a perfect pitch and pop it foul to the third baseman, after all.  So the key is to know your own risk tolerance and to not jeopardize any more capital than you can afford to lose.