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Why I Like the Risk-Reward Setup in 2 Earnings Plays for Thursday

by | Mar 21, 2024

The Micron (MU) bulls did it, they got their massive payday…

The calls we covered in a couple of different newsletters this week exploded higher Thursday morning on the heels of a massive move up on MU earnings. 

Micron closed right above $96 a share Wednesday before the earnings call, and the stock ripped as much as 18% overnight before opening up 17.6%. 

The March 28 expiration, $95 calls (nearly $600K in premium) we covered Monday tripled from Wednesday’s close. 

And the July $115 calls ($324K in premium) we covered Wednesday more than doubled, so those guys and gals are popping champagne.

This has been an absolute banger of a year for the stock market and trading! I’m personally starting to scale down and shift into a more conservative gear after the massive moves we’ve seen. 

I don’t personally love the risk versus reward in long-term swings right now…

That said, here’s something I do like the risk-reward setup in two stocks reporting after the close today… Nike (NKE) and Lululemon (LULU). 

We saw some put buying in these apparel giants… Normally, out-of-the-money puts can be hedges against long stock positions should the shares tank on earnings. 

But I like the risk-reward setup in a potential move lower in an overbought market. 

The two plays are a little longer dated, which gives you more time if wrong. But still, as always, respect that risk and only trade what you’re comfortable with losing!

Wednesday’s Top Order Flow: 

  • LULU May24 Strike: 380 Puts premium: $118,320 ASK BEARISH
    Trade Date: March 18, 2024 Trade Time: 2:19 pm
  • NKE Apr24 Strike: 103 Puts premium: $136,210 ASK BEARISH
    Trade Date: March 21, 2024 Trade Time: 11:03 am
  • COIN Apr24 Strike: 280 Calls premium: $1,238,350 ABOVE ASK BULLISH
    Trade Date: March 21, 2024 Trade Time: 11:26 am

3 P.M. ET UPDATE!

NKE and LLU now seeing call flow and more put action — in my opinion, this is just a coin flip and I wouldn’t even bother taking a trade.

  • NKE Mar24 22nd Strike: 101 Puts premium: $115,500 ASK BEARISH
    Trade Date: March 21, 2024 Trade Time: 3:03 pm
  • NKE Apr24 Strike: 102 Calls premium: $816,060 ASK BULLISH
    Trade Date: March 21, 2024 Trade Time: 2:52 pm
  • LULU Mar24 22nd Strike: 477.5 Calls premium: $216,302 ABOVE ASK BULLISH
    Trade Date: March 21, 2024 Trade Time: 1:38 pm

Note: If no date is listed after the month, it’s the monthly expiration (third Friday). 

Lance Ippolito Trading Team

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 

*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk. 

P.S. It’s Likely Not Your Fault…

If you’ve ever entered a trade only to see it go completely against you…

And you just can’t seem to figure out where you went wrong, even after looking at the technicals and fundamentals of the stock…

Chances are… the problem isn’t your analysis.

In fact, there’s a good chance your analysis was right…

But the stock was missing one key ingredient – volume.

If you had a chance to see my recent Master Indicator briefing with over 100,000 views, then you know what I’m talking about.

I warned folks that there’s not enough tradeable volume in the stock market to support meaningful moves…

But this is where it gets really interesting…

After successfully flipping tickers like GT, MANU and TRUP despite the overall “low volume” state of the market…

I realized that we can still target meaningful overnight opportunities…

All by doing what I call a ”Quick Flip”!

Let Me Show You Exactly How It’s Done

WRITTEN BY<br>Lance Ippolito

WRITTEN BY
Lance Ippolito

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