Chip shots and one inch putts

Earnings Season - Summer 2022

Last Sunday’s post Week 2 - Summer 2022 ER Season has had its paywall removed and is now visible to all free subscribers to this blog. Note that all trade alerts from this post are past tense and no longer opportunities. A couple of comments…

1. To reduce frequency of short newsletter posts via substack and email, I have implemented an invite only Telegram channel to provide intraweek and intraday alerts on the opportunities published in each Sunday’s newsletter. All Green Goose Trader premium fee paid subscribers on the annual plan will have access going forward.

2. Growth of Green Goose Trader has surpassed expectations. However, I want it to be clear that my goal for this newsletter/blog is to teach and mentor members to the point that they can eventually do everything we do here on their own.

3. Being a free subscriber (hopefully also embracing the concepts presented here) is a fantastic way to learn about and dip your toes into Green Goose Trader’s methodology for trading in and around earnings releases. You get everything (all analysis and alerts after the trades have been realized). However, if you want to participate in the profits, premium subscribers receive everything in advance.

Here is a brief summary of last week’s opportunities:

Pre-ER Directional

DHR didn’t make the expected move leading up to ER. IV rush made the expected move and helped prop up premium. I exited per plan on July 20th around 2:00 PM and took a 24% loss (exit alerted via Telegram).

BX Per trade plan, I entered two BX Jul23 $96 calls for $2.05 each on Monday, July 26th (entry alerted via Telegram) and set a GTC order to sell one contract for $4.10. The order to sell 1/2 of the position for a double was filled on Tuesday. I sold the second contract on Wednesday for $5.30 when I saw evidence of BX pinning to $100. I could have waited and profited more, but I would rather achieve longer term consistency by getting a higher frequency in a majority of moves. We never know where the top is. Nice trade in any case.

BYND On the noted entry date and time, BYND Aug12 puts were very expensive, low volume, and wide bid/ask. This was a no go.

JNPR Still in play. ER is next week. Per trade plan, I will exit EOD before earnings, win or lose.

Earnings Iron Condors

ABT - Sold three $105/106/114/115 weekly iron condors for $0.31 ($0.69 risk). ABT moved 1.55% on the day post ER. Implied volatility crushed and I bought back the iron condor for $0.14. Profit $0.17 per contract = Success.

DHI - Sold three $68/69/78/79 weekly iron condors for $0.30 ($0.70 risk). DHI moved 3.76%. Implied volatility crushed and I bought back the iron condor for $0.08. Profit $0.22 per contract = Success.

UNP - Sold one $205/207.50/222.50/225 weekly iron condors for $0.78 ($172 risk). UNP moved 1.19% on the day post ER. Implied volatility curshed and I bought back the iron condor for $0.22. Profit $56 per contract = Success.

PM - Poor liquidity and wide bid/ask. No go per rules. (Alerted via Telegram)

STX - Poor liquidity and wide bid/ask. No go per rules. (Sorry - didn’t get an alert out on this via Telegram).

TSLA - the Telegram group was alerted that the ascending triangle pattern on the daily posed the potential risk that a breakout could occur. No go. I generally will still play these, but I already had multiple earnings IC’s in play. It’s good thing as the breakout happened…

Bonus Plays for annual premium subscribers on Telegram Group

GOOG - Pre ER directional call calendar. Entry was alerted on Jul 18th at 3:44 PM for a GOOG Jul22/Jul29 $115 call calendar. I personally entered three contracts for $1.60 each. I alerted an exit on July 20th at 1:23 PM for 50% ROI. This trade will be the subject of an article this next week entitled “The Anatomy of a Pre-ER Directional Calendar.” Stay tuned…

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Here are this coming weeks (25 - 29 July) back tested opportunities. I have played a majority of them in the past for which the historical win/loss ratio is greater than 75%.

Iron Condors Candidates for Upcoming Week of 25 - 29 July

MMM                 Entry: Monday, 25 July (Past performance 4 out of 4 wins), Exit: EOD on Tuesday, 26 July.

NXPI                   Entry: Monday, 25 July (Past performance 4 out of 4 wins), Exit: EOD on Tuesday, 26 July.

MSFT                  Entry: Tuesday, 26 July (Past performance 3 out of 4 wins), Exit: EOD on Wednesday, 27 July.

ENPH                 Entry: Tuesday, 26 July (Past performance 3 out of 4 wins), Exit: EOD on Wednesday, 27 July.

PFE                     Entry: Wednesday, 27 July (Past performance 4 out of 4 wins), Exit: EOD on Thursday, 28 July.

LRCX                 Entry: Wednesday, 27 July (Past performance 4 out of 4 wins), Exit: EOD on Thursday, 28 July.

MA                     Entry: Thursday, 28 July (Past performance 4 out of 4 wins), Exit: EOD on Friday, 29 July.

VLO                  Entry: Thursday, 28 July (Past performance 4 out of 4 wins), Exit: EOD on Friday, 29 July.

FSLR                 Entry: Thursday, 28 July (Past performance 4 out of 4 wins), Exit: EOD on Friday, 29 July.

Directional Candidates for Upcoming Week

FVRR                 Entry: EOD on Thursday, 28 July - FVRR Aug19 calls with 30 to 40 delta, Exit: EOD Wednesday, 3 August.  This play is based on 4 out of 4 wins (average 104% ROI) based on entering calls 7 days before ER.   Position size to $500, stop at $250.

                            

DO YOUR OWN DUE DILIGENCE.  

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Instructions for Earnings Iron Condors

On noted day of play at 15:41, go into TomsOptionTools or your brokers option chain for the candidate and determine the premium for the weekly straddle (call + put), rounded up to the nearest dollar.  Subtract and add this amount to the current price of the candidate to obtain the short strikes.  Choose one strike further (at least $1.00) in each direction for the long strikes.  The candidate is valid if the total premium is a minimum of 33% ROI (=> $0.25 on $0.75 risk, $0.83 on $2.50 risk, etc…).  Less is not worth it.  Position size to Risk - $250 in the Options Players Swing Trading / ER Strategies Course.

For example:

The at the money straddle premium for MS on Weds EOD was $1.45 + $1.28 = $2.73.  The stock price was $84.13.  There for the ideal short strikes were $84.13 - $2.73 = $81 (rounded down) for puts and $84.13 + $2.73 = $87 (rounded up) for calls.  Long strikes were $1.00 distant at $80 puts and $88 calls.

Total projected premium EOD for +1 x MS Apr14 $80 put / -1 x MS Apr14 $81 put / -1 x MS Apr14 $87 call / +1 x MS Apr14 $88 call was $0.29 credit on $0.71 risk for a total potential ROI of 40.84%.  Position sizing for this example was 3 contracts x $71 = $210 risk.  Exit is categorically EOD the following day.

Note:  Candidate should be rejected if its options are illiquid (bid/ask for the short legs have > 15% slippage and/or the daily volume is < 20 contracts).