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Tesla beat on almost every number last night. |
EPS, revenue, auto gross margin, free cash flow all came in ahead of estimates by meaningful margins. |
The stock spiked to $406 in after hours. |
Then the CFO dropped a $5 billion CapEx revision nobody saw coming. |
By the time the call ended, the stock had fallen to $374. |
Opened down 4% this morning and kept going. |
Every analyst who studied the deliveries, the margins, the robotaxi data got the print right and still got the trade wrong. |
Nobody modeled a $5 billion CapEx revision on the call. |
There was no way to know it was coming. |
I could give two craps about the earnings. |
That is not a cute line. That is the whole framework. |
Four times a year the market opens a window. |
Earnings season. |
The moves get bigger and the setups get cleaner because every major stock faces its verdict in a compressed stretch of five weeks. |
I call these judgment days because that is exactly what they are. |
I know which stocks face their judgment day, which day, and roughly what time. |
The only number I care about going in is the expected move. |
Add the at-the-money call to the at-the-money put on any earnings name. |
Whatever that number equals is what the market is pricing as the likely distance of the move. Direction is a coin flip. Distance is a pattern. |
Before Tesla reported, I knew the market expected that stock to travel a specific range. |
I built a trade centered at that target with defined risk and held it one session. |
Here is the trade. Closed this morning. |
(-1) SELL 24 APR 375 PUT (+2) BUY 24 APR 367.5 PUT (-1) SELL 24 APR 360 PUT |
164% in one day. |
No earnings model required. |
The expected move told me where the stock was likely to land. The window did the rest. |
This framework has been producing the same results every quarter for years. |
Q3 2025: Microsoft at 297%, Google at 203%, Palo Alto at 182%, Affirm at 162%, United Airlines at 107%, IBM at 90%. |
Q4 2025: Lulu at 232%, CRM at 209%. |
Q1 2026: CoreWeave at 247%, Coinbase at 193%, Baidu at 170%, American Express at 150%, CRM at 84%. |
Fifteen trades across three consecutive windows. |
The smallest winner was 84%. |
That is not a lucky run. Quarter after quarter, the same window opens, the same structure sets up, and the results follow. |
It is baked into how the market works. |
Right now we are inside the next window. |
There are names reporting every single day this week and next, and every one of them has a judgment day already on the calendar. |
I just walked through the exact process I used to lock in 164% on Tesla in one day. |
The replay covers how I read the expected move, how I sized the trade, and how I managed it through the close. It is live right now. |
Watch the full replay here |
To your success, |
Don Kaufman |
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