🚨 I’ll be on at 1:30 p.m. ET 🚨
Chris Pulver is opening his private Trading Vault to reveal three market blueprints he says have outperformed every other discovery he’s made — but access won’t last long [tap to join us]!
You know what’s funny about trading earnings? Sometimes the stock that actually reports the monster quarter isn’t where you want to be.
Take Micron (MU)…
The stock had a huge move — exactly what everyone was expecting. But that’s the trap. When a heavily watched, high-profile name heads into earnings, implied volatility goes through the roof. Everyone crowds in, premiums explode and you’re suddenly paying top dollar for the privilege of being “right” along with everyone else.
So what happened to the brave souls who bought those MU calls? The weekly calls only returned 280%. And if you went with July calls, you made a whopping 130%. Yeah, I said “whopping” sarcastically — because that’s really not much for a huge move like we saw, upward of 18% the day after reporting.
There were actually three call buyers in MU seconds before the closing bell. I joked they’re going to jail — but honestly, they’re not. And even with that perfectly timed entry, they only 3x or 4x their money on a massive move.
Nothing crazy at all when you think about the expensive risk they took.
The Correlated Play That Actually Delivered
Now here’s where it gets interesting…
While everyone was laser-focused on MU, the best play was actually Western Digital (WDC). The sector momentum was there, the correlation was obvious, but the premiums weren’t completely inflated.
That made it a far better risk-reward setup.
WDC had high volatility, but not the max volatility that MU was carrying. The sector was moving as a whole and because WDC wasn’t the center of attention, the cost to participate in that move was dramatically lower.
The result? WDC calls were up 800% — nearly triple what MU weekly calls delivered. Now THAT’S a move worth celebrating.
Applied Materials (AMAT) was up nicely, WDC crushed it and DRAM had a solid move too. These were the correlated semiconductor names that captured all the sector strength without the insane volatility premium paid by MU buyers.
Why the Obvious Trade Often Disappoints
This happens more often than you’d think. The stock everyone is watching becomes so crowded that volatility spikes and premiums detach from reality. Even when the stock makes a massive move like MU did, your option returns can be surprisingly mediocre because you paid so much for the setup.
Meanwhile, the correlated names — the ones flying under the radar — give you exposure to the same sector momentum without the inflated premiums. They’re not priced for perfection, so when the move happens, your returns are substantially better.
Next time there’s a major earnings event that everyone’s watching, don’t just jump on the obvious play. Look for the names benefiting from the same trend but not burdened with maximum volatility. Those overlooked setups often deliver the best payoff.
The best trade isn’t always the most obvious one.
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.
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
P.S. I’ll Share My Private Trading Vault On Zoom
Lance and I will share three files from my private Trading Vault at 1:30 p.m. ET today.
I haven’t shared these secrets with the public before, and I’ll take them off the web pretty soon!
So if you want to check them out before they disappear…
