📈 Market Highs, Shaky Earnings: A Dangerous Combo?

The indexes look great on the surface — $SPY, $QQQ, and $NVDA are all near all-time highs.

But dig a little deeper into earnings season, and there’s a warning flashing:

📉 Positive results = small gains,

💥 Negative surprises = sharp sell-offs

That’s what traders call negative asymmetry — and it’s the key challenge this earnings season. So how do you protect your gains while still leaving room for upside?

Here’s how I’m hedging and trading around earnings.👇

---

🛡️ Strategy 1: Put Protection on Key Holdings

If you’re sitting on large unrealised gains in tech, AI, or momentum stocks, consider buying protective puts — especially into earnings.

Let’s say you own $AAPL ahead of results. If you want to stay long but fear a post-earnings sell-off, buying a 1–2 week put slightly below the market can cap your downside.

Why it works now: Volatility is still low for many blue chips

Cost factor: It’s not free — but cheaper than selling and rebuying

What I use: ATM (at-the-money) or slightly OTM puts, ideally into earnings week

Think of it as insurance — not a trade, but a buffer in a high-risk moment.

---

🔁 Strategy 2: Straddles/Strangles on Volatile Names

When I’m uncertain about direction but confident a stock will move, I consider straddles or strangles.

For example:

$SHOP or $AMD tend to move 8–12% on earnings. If implied volatility underprices that, you can buy a straddle (buy a call + a put at the same strike) to profit from movement either way.

When it works: If the actual move is larger than what options are pricing in

When it fails: Flat reactions or high IV crushes can wipe both legs

What I watch: Look at implied move vs historical earnings reaction

It’s not cheap — but in high-conviction volatility setups, it’s a clean way to trade without bias.

---

⚖️ Strategy 3: Spreads to Control Costs

Want to hedge or trade earnings without burning premium?

Then vertical spreads are your friend:

Put spread if you’re bearish

Call spread if you’re bullish

Enter debit spreads with a tight width (e.g., $5 wide on high-priced names)

For example:

You expect $TSLA to drop from $240 → $225 post-earnings

Buy a $235 put / Sell a $225 put

Lower premium than a naked put, with a defined risk/reward

This is my go-to for budget-friendly, directional hedges on high-IV stocks.

---

🔍 This Week’s Setup: Watching $NVDA and $PYPL

Here’s what’s on my radar this earnings season:

$NVDA: Everyone is bullish — which makes it a great candidate for protective puts or bearish spreads if guidance softens

$PYPL: Quiet chart, but often delivers volatile moves — possibly straddle-worthy

$AAPL: Already rallied hard — put spreads could be useful protection into earnings

Also watching $XLV and $XBI — biotech has been weak, but earnings season could surprise.

---

💬 Your Turn: What’s in Your Options Toolkit?

With the market at record highs and many stocks showing asymmetric earnings risk, how are YOU playing it?

🎯 Do you:

Buy puts to protect gains?

Sell calls to collect premium?

Use spreads or condors to reduce costs?

Drop your go-to options setup in the comments.

Best replies get Tiger Coins 🪙 — and maybe a feature in the next community thread.

---

> Disclaimer: This post is for informational purposes only and does not constitute financial advice.

@TigerStars  @Tiger_comments  @Daily_Discussion  @TigerEvents  @TigerWire