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Some notable earnings next week are: Tue (after the close)--IBM INTC YHOO, Wed--C JPM AAPL EBAY QLGC LUV BK WM, Thu--PFE HDI MER UNH SFA MOT, and Fri--GE SLB.

There are potentially big money making opportunities with Jan options on earnings next week. However, generally, Jan spreads rather than Jan straddles may be best, because a total loss can take place if the move is small. Consequently, I revised some of the trades below and if a big gain is made Tue after the close, other earnings opportunities not listed below can be taken.

IBM closed at 83 1/4, the Jan 80 calls closed at 3.60, the Jan 85 calls closed at 0.80, and the Jan 85 puts closed at 2.45. IBM can rise to 90 on earnings. However, the possibility of it falling after earnings should be taken into account. So, one Jan 80 call for each Jan 85 put or five Jan 85 calls for each Jan 85 put may be worth the risk. However, a loss will result, if IBM closes the week at 85 or between 80 and 85, without a big move.

QLGC closed at about 36. I believe, it has the potential to fall several points on earnings. So, Jan 35 puts, currently at 0.70, may be buys. Or Jan 37.5 puts and Jan 35 calls are buys in case the move is smaller.

MER closed about 70 1/2. It also has the potential to fall several points. The Jan 70 calls closed at 1 and the Jan 70 puts closed at 0.60. So, four Jan 70 puts, for example, for each Jan 70 call may be buys.

The potential to make huge gains quickly with Jan options should be weighed against the possibilities of taking big losses.