How We Attack the Tech Earnings Season
This article is a little bit late, we were busy loading up on the blatantly obvious tech massacre over the last few weeks.
I have two regrets going into the first week of tech earnings:
1.) I wish I would have doubled down on our positions.
2.) I wish our app had been approved during or before the pre-earnings drop happened.
For the first item, the experienced trader in me wouldn’t have allowed us to double down. Yes, in hindsight we could have killed it this week. But breaking trade rules always eventually catches up to you.
We like to keep it light and keep it tight (that sounds horrible, I know).
For the second item, I have some really good news. We have final approval (finally) from Apple and we will be launching the mobile app next week!
My apologies to the Android users, we solely focused on the iOS version for our initial release. We will be following up with an Android version shortly. We are working on a stop gap solution in the interim so that you can still get access to our trade recommendations and strategies.
Strategy Overview
Our strength lies in the FANG and popular tech stocks. We like anything priced between $100 and $300. Anything else with a price point much higher than that seems to create failures, but I’m sure we will expand our horizons as we grow.
Currently, our core positions are in AAPL and FB, along with trailing orders sitting in the QQQs and TSLA.
We always target the week before the actual earnings release. Why? The premiums are much lower than the week of earnings and we (almost) always see a hard drive up into the week of earnings.
To capture the upside of the actual week of earnings we shift our focus to the indexes. The QQQs has been good to us, along with the SPY.
This strategy has had an amazing rate of success in bull markets and it has performed absolutely horrible during a flat to bearish cycle. In the past, we would buy insanely large quantities of call verticals (or call butterflies) way out of the money. Once or twice this paid greatly (10,000% in gains), but most of the time we would catch a little upside, barely break even or lose the entire position.
Now that we have a bit more wisdom (and experience) under our belts we like to play a fraction of the quantity and go for core at the money or deep in the money positions.
With this strategy, we lean on the use of kick-stands to reduce the burn entering into the core of the trade.
What’s Next?
We are using this time to start hunting defensive trades to the downside. I have a feeling they will be pulling “Trump/Russia shenanigans” going into the fall.
Follow us on Twitter, Instagram or Facebook to stay up to date with our current trades.
I would also recommend hitting up our site and getting on the list for the mobile app, you can find us at YachtMoney.io.
