|
|
Don Kaufman here. |
Welcome to the Super Bowl of earnings season. Tech giants Alphabet, Meta, Apple, Microsoft, and Amazon are all stepping up to the plate this week, creating a perfect storm of trading opportunities. |
Here's a truth most won't tell you: |
Trading earnings doesn't have to be gambling. |
Yet that's exactly what most traders do - place directional bets and hope for the best. |
I'll be direct: Even if you handed me an earnings report in advance, I couldn't predict how a stock would react. |
Take Tesla last week - they beat earnings, missed revenue, and the stock still soared 21%. |
Unexpected? Absolutely. |
But you shouldn't let outliers discourage you. |
If you trade enough earnings trades, the numbers will work out. |
Let me show you why with AMD, reporting tomorrow: |
• Historical data shows AMD moves 6% post-earnings on average |
• Yet the options market consistently overestimates, pricing in 7.7% moves |
• Last July? Market expected 8.5%, stock moved just 4.4% |
• This week? They're pricing in a 7.6% move |
This is what we call the expected move - the market's best guess at how far a stock might move after earnings. |
And I'm not talking about some mathematical theory - this is real money talking. Billions of dollars of smart money pricing these options, giving us a roadmap of what's possible. |
|
Finding it is straightforward: Look at the at-the-money straddle - that's just the call and put at the current stock price. Add those prices together, and you've got your expected move. |
It's like the market is whispering its secrets to us. |
Here's where it gets exciting - we can use what I call an earnings butterfly spread to potentially profit from these moves. Think of it like setting up guardrails around where the stock might land. |
For example, with AMD trading at $159, we might set up a butterfly spread at 165/170/175 - costing us little but potentially paying off big if AMD lands near our target. |
During my 14 years watching order flow at thinkorswim and TD Ameritrade, I've seen countless traders blow up their accounts trying to predict earnings. |
But here's the thing - you don't need to predict. |
You just need to understand what the market is already telling you through the expected move. |
This week is particularly special because these tech giants have everything we want - massive liquidity in their options, weekly expirations available, clear earnings dates, and heavy options volume giving us reliable signals. |
It's the perfect setup. |
The beauty of this approach? |
It works in any market condition. Up, down, sideways - it doesn't matter. We're not trying to predict direction. |
|
We're playing the probabilities, using the market's own pricing to create our edge. |
Now, will every trade be a winner? |
Of course not. |
But that's the secret - we don't need them all to win. When you structure these trades right, the winners can more than make up for the losers. |
It's about playing the long game, being systematic, and letting probability work in your favor. |
Remember that Tesla move I mentioned? With this strategy, even massive surprises like that can't hurt you badly, but you're still positioned to capture the moves that do fall within expectations. |
While everyone else is gambling on direction this earnings season, you can be trading with actual edge. |
Because in this market, the only edge that matters is the one you can quantify and repeat. |
My Earnings Flips strategy has been developed over years of watching millions of trades and hundreds of thousands of traders. |
In fact, I used it last week to nail a 293% gain in COF. |
No more guessing games. |
No more crossing your fingers. Just methodical, strategic trades based on historical volatility patterns. |
The opportunities are already lined up. Meta, Apple, Amazon, Microsoft, Alphabet – they're all reporting this week. Don't let another earnings season pass while trading blindly. |
Ready to stop gambling and start trading earnings with confidence? |
Click here to learn the strategy now. |
To your success, |
Don Kaufman |
Tidak ada komentar:
Posting Komentar