Earnings season is BACK.
The big banks usually lead off, and if JPMorgan (JPM) is about to report, as it is on Oct. 13, that’s basically your cue for kickoff week.
Most traders approach earnings like they’re flipping a coin — pick a direction, hope for the best and watch their trade bleed out. There’s no edge in that game.
So today we’ll examine a systematic way to identify stocks where options may be pricing in more movement than the shares typically deliver, then sell that inflated premium before it collapses.
Once you understand this framework, it could change the way you interact with the stock market forever. Instead of guessing where a stock will go, you can focus on whether the expected move is overpriced.
That’s the whole game.
The Pitfalls of Traditional Methods
Traders often waste time studying candlestick patterns, guessing which strike to buy or worrying about expiration before identifying whether an edge exists. Those decisions can create the illusion of precision while leaving the most important question unanswered…
Is the options market charging too much for the stock’s likely movement?
When the expected move materially exceeds the stock’s typical range over a comparable period, options volatility may be overpriced. That can make the stock a candidate for selling premium — not because we know its direction, but because the pricing may favor the seller.
The framework is simple but selective. Look for a market maker move substantially above ATR, enough liquidity for tight bid-ask spreads and sufficient premium to justify the risk.
When all three align, you have a potential edge — not a hunch. No methodology eliminates risk, so position sizing and defined exits remain essential.
That’s what separates traders who consistently collect premium from those who are guessing and getting lucky.
Order Flow:
This is for informational and educational purposes only. These are not official alerts issued by Lance, but rather some interesting orders picked by the team at Lance Ippolito Trading.
When you look at these plays, always take the market maker move into consideration.
You can be right on the direction but still lose money if the stock doesn’t move enough. That’s where the market maker move comes in clutch.
With puts, they’re often downside hedges in case a stock tanks, especially around earnings. The further out of the money they are, the more likely they are to be hedges.
Also be sure and check when the company’s earnings date is because many of the plays we post here are centered around earnings!
If a stock is really expensive, consider a spread to lower the cost.
And finally, always remember the golden rule when it comes to buying calls: Buy dips, sell rips — and don’t chase!
If a stock’s moved a ton already today, maybe wait for a pullback.
There is inherent risk in trading. Trade at your own risk.
Note: If no date is listed after the month, it’s the monthly expiration (third Friday).
The team at Lance Ippolito Trading
Lance doesn’t want the CCP spying on him, so you’ll never find him on TikTok. Same goes for other social media sites, which are filled with impersonators, scammers and crypto bros.
You can only find him on his personal YouTube Channel — smash that Subscribe button! https://www.youtube.com/@LanceIppolito
And in his private Telegram channel: https://t.me/+-gVwEIwGJhplMTgx
Important Note: No one from the team at Lance Ippolito Trading, New Money Crew or any of its associated brands will ever contact you directly on Telegram.
*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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