Marketgems Earnings Trader- Trading Strong or Weak Earnings Growth

[jenna]

SINA target 30, 30 puts ($0.70 to $1.45 May 40 calls dirt cheap picked up before a surge yesterday called intraday, gains in calls already locked in $0.40) so the loss was minimal, and expecting a swing play on NTES and SINA puts and SOHU (hopefully as a beginning put position today) SINA and NTES were straddled through the report, not SOHU YET. All support taken out for SINA no reason to expect it to halt before hitting 30 or even 29.50. Bearish short term which what we've said since earnings season began for technology and we were pretty neutral on the Asian nets although the prior downfall was of concern. We've called a crash in them however the calls were too cheap to pass up.

We saw this could go either way.


We saw the potential that the downside would be priced in so we were careful to get that short and put play early (10:00 as posted in the 'chart call out')



When you lock in profits on the the "anticipatory upswing" for SINA (we called the breakout yesterday) and "anticipatory downswing" for MXIM (we called a first trade in direction of 10:00 you lessen any damage from calls or puts although the straddle is still huge the anticipatory move adds to the profits.

Simplifying an earnings play to merely "I'm holding this through earnings no matter what days in advance" you get all the damage and none of the benefits of the "anticipation" phase. The benefits add up WHEN YOU SHORT after the report (cycle 3: gap 'n crap) and hold those puts for MAXIMUM OVERDRIVE possibly at least 4 sessions and possibly as much as through options expiration (like SNDK and LEXR)