Square Inc – Another Winner Coming Up

Square Inc (NYSE:SQ) Option Calls Already Up 50%  -- Aim Is 100%! --

by Ian Harvey

April 18, 2018




Square Inc (NYSE:SQ)

Here is an update of Squares options call trade after two days of executing the trade by members of Stock Options Made Easy. This options trade was recommended in the article “Armchair Trader Series” Recommendations - Week Beginning Monday, April 16, 2018”; which has already produced excellent  profits of more than 50% -- the aim is 100% profit -- and more is expected to come – all within 48 hours of executing the trade!


The Trade to Consider……

…….from “Armchair Trader Series” Recommendations -- Week Beginning Monday, April 16, 2018”

The Details……..

Payment processing and point-of-sale upstart Square Inc. (NYSE:SQ) stock is up 30% for the year, and the fundamentals are still intact, despite headlines that have caused volatility in the equity markets to spike. There have been panics over spiking interest rates, the threat of tariff wars, social media data breaches and more recently the airstrikes in the Middle East.

There is a strong trend moving financial transactions to the online realm and that benefits companies like Square.

Mobile point of sale system Square is well known for the credit card readers that have turned smartphones and tablets into payment processors, but the company's real strength is as a platform which small businesses can build on top of. Point of sale may be the visible component for customers, but the company does payroll, inventory management, and even small business loans.

SQ stock fell 20% in February, but it rallied an astonishing 60% into March. It has since given up about half of that rally, but in the process, it has established a couple of pivot points that are important.

Square, Inc. is expected to report earnings on May 02, after market close. The report will be for the fiscal Quarter ending Mar 2018. Based on 8 analysts' forecasts, the consensus EPS forecast for the quarter is $-0.04. The reported EPS for the same quarter last year was $-0.03.

However, equities researchers at Jefferies Group increased their Q4 2018 earnings per share (EPS) estimates for shares of Square in a note issued to investors on Thursday, March 29th. Jefferies Group analyst R. El-Assal now anticipates that the technology company will earn $0.04 per share for the quarter, up from their previous estimate of $0.03. Jefferies Group also issued estimates for Square’s Q1 2019 earnings at $0.01 EPS, Q2 2019 earnings at $0.08 EPS, Q3 2019 earnings at $0.07 EPS and Q4 2019 earnings at $0.12 EPS.

The Trade……..

** OPTION TRADE: Buy the SQ JUNE 15 2018 48.000 CALL at approximately $4.00. Place a pre-determined sell at $8.00.

Also include a protective stop loss of $1.60.

The Result………

Shares Square spiked 5 percent today after Nomura Instinet analyst Dan Dolev said it could see a major first-quarter earnings boost thanks to bitcoin.

Dan Dolev says that Square Cash, the mobile payment app developed by Square, opened bitcoin trading earlier this year, and that move could drive a "sizable boost" to the tech company's revenue and profits this quarter and a 10 percent potential upside to adjusted EBITDA guidance, according to Nomura Instinet analyst.

"This can help offset rising investment costs required to broaden Square's international presence," Dolev wrote in a note to clients today.

Instinet reiterated its buy rating and raised its price target by a dollar to $65, about $15 above where Square was trading today. Dolev cited more disruption in the payments space and more higher-margin products and services as reasons for the bullish call. Square's stock is up more than 48 percent this year.

Future Outlook……

Dolev estimated that Square could generate $125 a year in revenue from each user that trades Bitcoin on the Square Cash app, which he projects could be 2% to 6% of the app's user base.

He calculated that Square Cash could boost adjusted revenue by 1% to 3% for the first quarter and adjusted earnings before interest, taxes, depreciation, and amortization (Ebitda) by 3% to 10%.

At the same time, he wrote that Square's stock trajectory has become less correlated to the price of Bitcoin in recent months.

The Profit……..

So, for members of the “Armchair Series” who managed to execute this trade recommended by Stock Options Made Easy; a nice tidy profit already of more than 50% made within 48 hours.  And expect that the 100% target will be reached in a short period of time.

Entering the option trade at a cost of $4.00 or less; reaching as high as $6.06 (at closing was $5.95); one options contract would provide a profit of $206.00.



The intention is to hold this trade until it reaches the 100% mark, but as always, now is a good time to decide if it is worth continuing to hold this trade or exit on excellent profits. It is nearly always prudent to exit a trade before an unknown incident occurs that could rattle a sound profit, and this is a fine example of such a situation.

As you would have by now realized, many of our trades are based on earnings predictions. This is not to say all trades recommended to members follow this pattern, but during earnings season this strategy has been very profitable.

Our approach is to predict whether a company will beat or miss estimates, whether the stock will appreciate or depreciate as a result and what strategies investors and traders can use. This type of prediction is based on thorough investigation and fundamentally based research, and the results have been very exceptional.

Our proven track record says it all!!

Members of Stock Options Made Easy are provided with an extensive reason as to which direction a stock will move after earnings, followed up by a recommended options trade.

What To Do Now…….

If you interested in being part of this profitable action just click here……

Best of Trading,
Ian Harvey
Director of Stock Options Made Easy


”Success is simple. Do what's right, the right way, at the right time.”

Option Tip for your Success!
Options traders are not successful because they win.
Options traders win because they are successful.

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