Beats Are Getting Sold. Misses Are Getting Crushed.
BEATS ARE GETTING SOLD. MISSES ARE GETTING CRUSHED.
$APP: down 28% on a 1% miss
$DDOG: down 18% on a beat AND raise
Long into a print and not sure? Collar it. What I did on $AAOI today, earnings tonight:
Keep the shares
Buy the $110 put, 2 weeks out (Aug 21)
Sell the $160 call to pay for it (Aug 21)
Total cost: about 0.5% of the position
If you want it FREE or credit, lower the CC strike
Worst case locked at -15%. Upside open to +24%. And that high pre earnings premium everyone complains about? I’m the one SELLING it.
You can’t control the print. You can control your worst case.
