02252016 MELI PME

DONATIONS TO SINL ACCEPTED HERE

by Bill Baker, J.D. (bb)
Editor and Publisher SINL

On 02182016, MELI closed at 98.80. After the market close on 02252016, Mercado Libre (MELI) reports 4th quarter 2015 earnings. Will this earnings report represent a significant MELI price moving event (PME) to the upside or downside? Or will MELI head back to its February 2016 low of 84.19 that it reached on 02092016. 

There has been a significant downward bias in the stock market since MELI's 3rd quarter 2015 earnings were reported on 11042015 after the market closed. On 11042015, MELI closed at 107.00. After earnings on 11052015, MELI opened at 118.64, reached a high of 122.65 and closed at 116.43.

On 02252016, MELI must significantly exceed earnings and revenue projections and provide a pristine, sunshine filled business forecast in order MELI shares to break above 110 and get anywhere near their 11052015 price points. On the other hand, MELI shares will most likely fall below 80 if there is an earnings miss accompanied by a negative conference call forcast. MELI shares will decline post earnings. 

MELI EARNINGS PLAY STRATEGY

We need:
1) time - minimum 3 months
2) long puts and calls
3) to target 50 - 150 price range

On 02182016 MELI closed at 98.80 +.56 (.57%)
Option Contracts (02182016 close prices):

SEP 16 '16 150.00 call b. 1.05 x a. 2.55 TV: 5.979 D: .2602
SEP 16 '16 145.00 call b. 1.45 x a. 3.10 TV: 6.896 D: .2886

JUN 17 '16 135 call b. 1.20 x a. 2.30 TV: 4.315 D: .2421
JUN 17 '16 145 call b. .40 x a. 1.40 TV: 3.210  D: .1892

JUN 17 '16 55 put b. .30 x a. 1.25

TV=Theorectical Value -- D=Delta