Take Shopify (SHOP). It's a recent earnings winner, going from $127 to as high as $156 this week. The expected move for SHOP for earnings was 10.4% - that's what the options market was pricing in. But SHOP actually moved 22%. That's more than double the expected move. This is exactly what my Opening Bells Aftershocks strategy aims to capture. We saw this pattern recently in META, where the expected move was 5.7% and the actual move was 11.3%. META hit a high after earnings of $774.89, then dipped the next day to as low as $745.31, and climbed back up to the $760s. Real Trading, Real Results I tried buying weakness on SHOP yesterday - had success with one trade and failed on my second attempt. That's the reality of trading in this environment. Even with statistical edges, you're not going to bat 1.000. But here's what I learned: After watching the Nasdaq sell off with everything else during yesterday's reversal, any trade I take will be in and out, very short-term focused. Your Action Plan If the Nasdaq can regain momentum above yesterday's highs, I think there's a way to make money long SHOP via call options. But given Thursday's market character - that violent morning-to-afternoon reversal - I'm treating every position like a day laborer job. Get in, do the work, get paid, get out. If you want to learn more about why I love trading these statistical edges in earnings winners, check out Opening Bells Aftershocks. |
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