Dear Profit Takeover reader,

BP, DIS, UBER, and some other really big names all have earnings next week… but you know my earnings motto…

“Trade to it, not through it.”

But what about after earnings?

Implied volatility (IV) tends to rise before a report.  But after the report comes out, IV tends to crash…

Making options incredibly cheap – giving us the perfect opportunity to open a trade.

Before and after – those are the key times to trade an earnings report.

So here’s my watchlist for this week – comprised of two stocks – F and AAPL – that have already gone through the earnings ringer, and one that has earnings farther out in April – TSM.

  1. F – Ford Motor Company (NYSE:F)

F posted earnings on Thursday, February 2nd. While revenue beat 2.62%, EPS were down 17.59%.

Since then, the stock closed at $14.32 on Thursday, and closed at $13.22 on Friday… and IV has been crushed.

I sold a put spread in F last week. You might be able to sell a cheap put spread to buy a call spread in F.

I think the money on the downside is ripe for picking and F could have a little pop. 

  1. AAPL – Apple Inc (NASDAQ:AAPL)

Chip stocks are doing really well despite poor earnings. AAPL is no different. 

AAPL also posted earnings last Thursday, February 2nd… and missed both EPS (-3.64%) and revenue (-3.70%). 

Despite all that, it closed at $154.66 on Friday.  

On January 25, 2023, Licia Leslie, my colleague and Head of Trading at Option Pit, called AAPL hitting $150 before it drops again

AAPL is really great to play day trades if you have the ability because even though AAPL is up, you can play options on intraday moves. 

  1. TSM – Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM)

Andrew Giovinazzi, the trader who wrote the program that taught me how to trade, thinks TSM will go to $100. The volatility on TSM is way too cheap here.

If you could find cheap calls here, that might be a quick move to play. 

Andrew thinks we could see a strong move here – and I trust his predictions. 

I will give an update to this watchlist tomorrow morning at 10:30 a.m. (ET) during the live Profit Takeover show right here – so don’t miss out.

Until next time,

Mark Sebastian


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