Taking a Shot at Whirlpool (WHR)

Whirlpool Corporation (WHR) manufactures and markets a range of appliances and related products, primarily for home use. The Company’s principal products are laundry appliances, refrigerators, cooking appliances, dishwashers, mixers and other small household appliances. It also produces hermetic compressors for refrigeration systems. Whirlpool manufactures products in 12 countries under 13 principal brand names and markets products worldwide. Whirlpool’s geographic segments consist of North America, Europe, Latin America and Asia.

WHR is trading at $96.65 as of this writing.  Goldman upgraded the stock this morning to Buy.  I am opening the following calendar position:


- Buy to open June $100 calls
- Sell to open May $100 calls


When you individually look at those strikes, options seem very expensive.  But combine them in a form of calendar spread and I just filled the order for $0.75 debit.  


WHR will report earnings before market opens on 4/27.  The stock is breaking out to fresh new 52-week high today.  I believe 95 to 100 range will be with us for a while.  Earlier today, there were several put sellers at May $90 strike on the bid.  Technically, the stock has been running within a very well defined channel for over a year.  


Given Goldman upgrade, stabilizing housing market, earlier put sellers, technicals and the IV skew between May and June (36 vs. 31), I believe the trade provides very decent risk/reward if done for $0.80 or less.  


Good luck!