Premium Protection vs Time Decay Here's what happens when you buy calls expiring after earnings instead of before: Traditional Approach: Premium erodes daily → Volatility crush at earnings → Even winning moves lose money Premium Protection: Slight erosion → Then premium EXPANDS into earnings → You get paid while you wait When you buy options expiring after an earnings event, the premium follows what I call the "protection curve" - drops slightly, then actually rises as the announcement approaches. The AAP Execution I grabbed November 21st $65 calls. Target: Break over $70 toward $72-75 (15% stock move = 100%+ option gain) Exit Strategy: Scale out before November 12th earnings Why it works: Premium expansion into earnings + clean technical breakout The daily chart showed that "woodpecker pattern" - multiple tests creating pressure at $65. Once this breaks higher, there's nothing but air until mid-$70s. Why This Beats Quick Strikes When you buy options expiring right after earnings, you fight time decay every day. That brutal parabolic curve toward zero. But buying options expiring after earnings? You can watch your option value increase even if the stock just sits there, thanks to volatility expansion. The Anti-FOMO Strategy I could have forced something earlier. XLP had a dozen mediocre names. But that's not how you make money consistently. Sometimes the best strategy is waiting for the right setup, even if it means being bored for a month. How to Apply Premium Protection Next time you're eyeing an earnings play: - Find strong technical setups with earnings 2-4 weeks out
- Buy calls expiring 1-2 weeks AFTER earnings
- Enter early for volatility expansion benefits
- Scale out profits before the announcement
You'll pay slightly more upfront, but you avoid the premium death spiral that kills most earnings trades. Your Action Plan AAP is working exactly as planned. Daily squeeze fired, initial push higher, and November 21st expiry gives me room to work. The best part? You can be "wrong" on timing and still make money. As long as the technical setup eventually works and you have premium protection, time decay won't kill your position. That's how you turn boring months into profitable ones. If you want to follow more trade ideas, check out Daily Profits Live. |
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