STOP Gambling on MU Earnings – Do This Instead
Summary
The host advises against gambling on pre-earnings moves, citing historical data showing zero average edge and significant risk. He explains how to calculate expected volatility using option prices and warns about post-earnings volatility crush. Instead, he teaches the "gap and go" strategy, where traders wait for the earnings gap to occur before entering based on price action relative to the gap candle's low.
Topics discussed
Introduction: Stop gambling on Micron earnings
Why prices move violently post-earnings
The desire to be the hero and catalyst risk
Netflix example: Pre-earnings run and gap down
Data: No historical edge in trading earnings
Micron's 41% drop after previous earnings
Audience predictions and uncertainty of outcome
Using option prices to gauge expected move
Sponsor segments: Instagram, LinkedIn, Gatorade
Calculating the expected move for Micron
Post-earnings volatility crush and option risk
Introduction to the Gap and Go strategy
Defining the gap and identifying Gap and Crap
Analyzing Palantir and Micron gap patterns
Strategy: Wait for the gap before entering
Outro and call to action
Listen ad-free on Castria