Visual tech firm (think 3D and similar features) RealD (RLD) will be reporting its numbers after the close of Tuesday trading. Analysts expect RLD to earn 11 cents per share,and the chance for an earnings surprise is high considering the 11 analysts covering the stock have estimates ranging anywhere from 5 cents to 17 cents per share.

RealD lost 3 cents per share in the year-ago period and has been bleeding money for four straight quarters. However, it has managed to beat Wall Street’s estimates each quarter over the same time period, so with a profitable quarter penciled in, this should be a make-or-break announcement for RLD.

I previously have recommended bearish option trades on RealD when shares were in the mid-teens, but I feel trapped on another bearish trade if this is a turnaround story.

The movie business has struggled for much of the summer. RealD’s focus is in 3D, and while there have been a few decent flicks of late, 3D has lost its pizzazz as moviegoers shun higher ticket prices. Some theaters are offering Daily Double features, as was the case with the recent Dawn of the Apes movie.

Getting into the numbers …

RealD has seen some big swings in the past year or so.

• The 52-week range for RLD shares have a yearly peak north of $13 and a low of $6.19.
• In early May, shares moved from $11.10 to $11.89 (7%) following earnings, after reaching an intraday high of $11.91. The next session, shares tripped $12.30 intraday for a 10% move over a two-day period.
• In early February, RealD zoomed from $8.64 to an intraday peak of $10.69 before settling at $9.44 after “beating” estimates. This represented a 24% pop from the prior close to the intraday peak.
• On Nov. 12, 2013, shares jumped from $7 to $8.76 (25%) following “better-than-expected” losses — not profits, but losses.

RLD stock has a very high short interest float of 9%, with a short interest ratio, or days to cover, of eight trading sessions. To dummy things down, this means a short squeeze could occur if the company does actually turn a profit. This could happen and an unexpected product announcement, or “innovation” type upgrade, to the current 3-D glasses would help. But I doubt RealD has that in its pipeline. Perhaps Facebook (FB) does with its recent acquisition of Oculus VR, but not RealD.

The RealD Sep $12.50 calls (RLD140920C00012500) are “cheap” options to play on a possible move toward prior 52-week highs. At two dimes, shares would need to be at $12.70, technically, by mid-September for the trade to break even. At $13, these call options would be 50 cents “in the money,” and the return would be 150% from current levels.

Of course, this would require a 20% upside move in the stock.

The RealD Sept 10 puts (RLD140920P00010000, $0.55, up $0.05) could be used as “insurance” in case shares decline 10% to 20% on an earnings miss. This would put the stock at $9-$8 from current levels. For 55 cents, these options also look “cheap” as well.

At $9, the aforementioned put options would double from current levels as they would be worth a buck or more. A trip to $8 would also make this a 150% winner as they would be worth at least $2-$2.10.

By buying both the calls and puts, the cost of the trade would be 75 cents. Shares would then need to be at $13.25 or $9.25, technically, by mid-September for the strangle option trade to break even.

I like these odds better than rolling with the calls or puts straight-up because I have never been a firm believer in the company’s business model. RealD could surprise to the upside but I would use a safety net in case they let the suit-and-ties down.

A Look Back at World Wrestling Entertainment (WWE)

One earnings trade I did pull the trigger on that has paid off big-time are calls in World Wrestling Entertainment (WWE). On July 30, I recommended that my Momentum Options members buy the WWE Sep 13 calls ahead of its July 31 earnings, and we got in at 50 cents.

WWE is an iconic stock that has been way oversold and folded like a cheap lawn chair after letting Wall Street down in prior quarters. However, in late May, the company said it was sticking with its quarterly subscriber guidance. Shares had been slammed in recent months, but the technicals told me the shares could make a monster move if the company said subscriber growth is back on track.

It did, and we gradually took profits in our calls by closing out some of our contracts at 90 cents on July 31 to take overnight 80% profits, while holding some calls for further upside. Today, those calls were trading at $1.30, where my Momentum Options traders grabbed another 160% in the trade.

We still have a few bullish WWE call contracts in play, and for those who are considering the stock going forward post-earnings, World Wrestling also has a partnership with Lions Gate (LGF) to produce movies that could add to the bottom line in futures quarters.

WWE also pays a 4% dividend and has not said it is in danger of being suspended (which, if it were, would be a warning sign of a struggling company).

Shares have traded to a high of $13.84 and, as Hulk Hogan might say, a close above $14 would be beautiful, brother! Near-term support is at $13 and moving up.