Here I Go Here I Go Here I Go Again Shoop
Last calendar week's earnings moves were insane…
Facebook — sorry, "Meta Platforms" (FB) — plunged over 20%.
And then, ane of its competitors comes out the adjacent day and posts its first-ever quarterly profit.
But like that, Snap (SNAP) surges nearly 60% in a single day.
Earnings season is full of wild moves you and I didn't encounter coming. And while information technology may be tempting, betting on them is nada more than a gamble.
You lot might not like hearing it, but it'south true. Exterior of insider info, no amount of research or analysis y'all could practise will ever give you an edge going into an earnings declaration.
Information technology'due south why I've focused on trading stocksafterwards they study earnings.
We can use the earnings announcement itself as a boost for the stock, and find profitable trends that develop. (Keep an eye on your inbox these adjacent couple weeks for something really special on this topic.)
With all that said, people are making and losing a killing on these big moves. And my unusual options activity scanner picked up some wild plays concluding week, which can give us some insight.
Just ahead of Facebook'south 20% nosedive, someone laid out $ane.2 meg with a short-term options bet. They would accept lost it all.
But another Facebook options trader, who laid out $470,000 on a $310 put option the day before, could accept bagged nearly a 10x gain that would have turned into more than $4.7 million.
Aforementioned with Snap…
After the stock dropped on weakness from Facebook, traders were buying both calls and puts on the stock. One trader scooped upward a Bound (Long-term Equity Anticipation Securities, essentially a long-dated option) worth $1.39 meg.
The next day, they shot up $3 million.
And another trader who bought an option expiring on the day of earnings, could accept turned their modest $235,000 bet into $1.4 1000000.
These are extreme examples. And these traders wagered hundreds of thousands, sometimes even millions on naught more than than a gamble.
Just in some rare cases, it pays off handsomely.
And then, with all that said and being fully transparent that these are nothing more than a gamble, only for entertainment purposes, let's wait at where traders are placing their bets from final week.
Below are the top five call option trades and the elevation 5 put option trades my scanner picked upwardly for companies reporting earnings this week. Again, THESE ARE GAMBLES. If you're going to trade these, trade small-scale.
Bullish Unusual Options Action Gambling on Earnings:
One trader put upwards $410,000 on theAffirm (AFRM) $80 Feb 18 calls. Earnings report is on February 10.
I also spotted $1.seven million go into theTwitter (TWTR) $35 February eleven calls in ii slugs, an hour autonomously. Earnings are on Feb 10.
$676k went into theCentene (CNC) $82.50 February 18 calls. Earnings report is February eight.
My scanner picked up $443k going into theUber Technologies (UBER) $40 February 11 calls. Uber reports earnings Feb 9.
And concluding upward for our bullish activeness, one trader bought $194k worth of theDisney(DIS) $150 February 18 calls. Earnings report is on February 9.
Merely it'south not all bullish activity. There were plenty of bears out in the market trying to gamble on earnings…
Bearish Unusual Options Activity Gambling on Earnings:
I spotted $810k going intoEnphase Energy (ENPH) $120 Feb 18 puts. Earnings are on February 8.
I saw two trades of over $600k going intoPeloton Interactive (PTON) $27 February eighteen puts. Earnings are also on Feb 8.
One trader boughtAres Majuscule (ARCC) $21 March eighteen puts for $404k, expiring March eighteen. Earnings are on February 9.
My scanner also picked upwards $372k on the SONO $23 Feb eighteen puts. Earnings will exist reported Tuesday, February ix.
And finally, $249k on the APPS $42 February 11 puts. Earnings are tomorrow, on February 8.
Again, any analysis or research we try to add to an earnings bet, just doesn't mean annihilation.
Fifty-fifty if it'due south right, it'southward all upwardly to luck.
We could even exist wrong with our research, meaning the reason the stock would rise or autumn, and still get the trade right.
Earnings are a truly volatile time of the year and have the potential for big gains. Just make sure you lot understand the risk.We'd be lucky if just one of those trades highlighted above returned a triple-digit gain.
The truth is, most are going to elapse worthless and turn into quick losses.
But… perhaps you know something I don't. Yous run into one of the stocks and it just clicks.
I don't know. I just know this is an exciting fourth dimension of the year and we have all this data.
Permit's run across if some of these unusual options trades brainstorm to hit. I'll revisit some of these in next calendar week'due south upshot and see if any of them made information technology out large.
That's all for today. But I practise take a special declaration for afterward this week…
On Th, I'm launching a brand-new YouTube series called Quick Takes LIVE.
In this serial, I'll go live at xi:xv a.m. ET to deliver my off-the-cuff takes on stocks that you phone call out to me in the conversation box.
It's an exciting new approach to our content that I know you're gonna dearest.
I await forward to what you lot bring to the table.
Regards,
Chad Shoop, CMTEditor,Quick Striking Profits
Chart of the 24-hour interval:A Good Spot to Buy?
(Click here to view larger image.)
Commonly I don't talk about specific companies in Chart of the Twenty-four hour period. I like to give y'all a broad market motion-picture show that can help inform smaller-telescopic trading ideas.
But the Spotify story correct now — and the valuation — are hard to ignore.
Unless you're completely out of tune with the internet discourse (and if yous are, you live an enriched life and should go on it that fashion), yous know that Spotify and Joe Rogan have taken heat the by few weeks for some of Rogan's choice of guests on his show.
I won't get into farther detail than that, as this isn't actually the place for it.
All you need to know is that Spotify'south stock has taken a bit of a haircut in response. Only the nautical chart action tells me this volition be brusque lived, and SPOT is at least good for a trade hither.
It has that classic sign of an oversold bounce about to opposite: Bullish divergence on the momentum indicators.
When I see that, I can't assistance but be tempted to bid.
On elevation of that, Spotify is down more 50% from its all-time loftier a year ago. Information technology simply beat on earnings and remains the predominant music streaming platform on the market place. If you lot take the breadbasket to buy a tech stock in this volatile environment, y'all could do a lot worse than buying SPOT here.
Regards,
Mike MersonManaging Editor,True Options Masters
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Source: https://banyanhill.com/earnings-roundup-10-dicey-uoa-trades-to-watch/
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