Options Boot Camp 406: Is The Worm Finally Turning?

All right, everybody, let's get down to business.

A little bit of the old options drills.

And you know what? It's that time of year, listeners.

Earnings season is winding down.

We did see a lot of the big MAG-7, MAG-10 names popping off last week.

Of course, culminating in the big dog, which is NVIDIA recently.

They loved it immediately post-earnings.

Then they smacked it.

Now they're loving it again today.

So it's very much a binary trade out there.

But We've been talking earnings quite a bit on some of our other shows out there.

And of course, we have talked earnings related strategies on this show many times.

Again, go into the archives to search for earnings.

You'll see a lot of fun.

What we talked about over the last 13 plus years on this network.

I want to kind of dive into earnings right now, listeners, because like I said, it is that time of year.

The season is winding down and we noticed a couple of interesting things.

trends that I kind of wanted to point out to you folks out here, because as I've mentioned many times on this show, we are kind of the keepers of earnings data these days.

We kind of fell into that role over there at the Options Insider.

We started doing it a while ago because quite simply, there wasn't a lot of good available earnings data for a lot of our listeners and people would hit us up all the time should i buy straddles going into earnings or should i sell them should i buy premium or should i sell that was the number one question and outside of one goldman study i think from you know 2006 or something like that there wasn't really a lot out there you know you could obviously be a big customer of a big house you could commission some research and they would do it for you but stuff that was readily available didn't really exist so i kind of strong-armed matt and his team many years ago into providing us that data and we started giving it to you for free again many years ago and it's all still there on the website for you so if you want to go check out some earnings data It's all there, theoptionsinsider.com. Click on the Options, News, and Articles tab, and you can go as deep as your heart is content, listeners, in earnings fun.

But the reason I want to talk about earnings today, not just because the season is winding down, but also we are starting to see a little bit of perhaps the worm turning.

When we used to get this question a lot, even on some other shows, like The Advisor's Option, because Matt was on that show with me a lot, and he was crunching a lot of this data.

We would always say at the end of the day, going into earnings, it was primarily a coin flip, whether you bought or sold premium.

You can make money both ways, and it was never really that predictable which way you should go.

That said, the last couple of years, let's say the last six to eight cycles, really, have really been... predominantly biased towards the premium buyers demonstrably so to the point where we started saying in aggregate you should start leaning long premium because it seems to be working out quite a bit and we kept saying this can't last forever that worm probably has to turn eventually and it seems like it might be starting to turn out there which is why i wanted to do A little bit of a dive into earnings trading right now.