To The Moon

Straightforward and easy to follow—just copy the playbook.

How Have Bank Stocks Performed?

• Since the release of Q1 2025 earnings, the Bank Index (BKX) has risen by 26%, outperforming the S&P 500’s 17% gain.

• The regulatory environment for banks is undergoing a positive "structural shift". Looser regulations are expected to boost the valuation prospects of the entire sector.

• However, the good news has already been priced in, and any further upside in stock prices will heavily depend on exceeding the expected Earnings Per Share (EPS) growth.

How to Evaluate Bank Stock Expectations

1. No Major Bearish Expectations
   The absence of significant negative catalysts eliminates the chance of a major price drop.

2. Outcomes to Consider:

   • If results meet expectations: stock prices may stagnate or dip slightly.

   • If results exceed expectations: stock prices are likely to rise.

How to Trade Bank Stocks

From a high-probability perspective, since the risk of a major drop is very low, consider selling put options.

• Strategy:
  Sell put options before the earnings report and close the position at the market open on the day of the earnings release.

Strike Price References

• $Financial Select Sector SPDR Fund(XLF)$ : Sell July 18th expiration 51 put
  $XLF 20250718 51.0 PUT$ 

• $Citigroup(C)$ : Sell July 18th expiration 83 put
  $C 20250718 83.0 PUT$ 

• $JPMorgan Chase(JPM)$ : Sell July 18th expiration 275 put
  $JPM 20250718 275.0 PUT$ 

• $Wells Fargo(WFC)$ : Sell July 18th expiration 79 put
  $WFC 20250718 79.0 PUT$ 

• $Goldman Sachs(GS)$ : Sell July 18th expiration 675 put
  $GS 20250718 675.0 PUT$ 

• $Bank of America(BAC)$ : Sell July 18th expiration 44 put
  $BAC 20250718 44.0 PUT$ 

• $Morgan Stanley(MS)$ : Sell July 18th expiration 135 put
  $MS 20250718 135.0 PUT$ 

Earnings Season Profit Secret: IV Crush

IV Crush (Implied Volatility Crush) happens when the "expected volatility premium" in option prices collapses, causing a rapid decline in their value.

What is IV Crush?

• Before major events (e.g., earnings reports, Fed decisions), uncertainty about significant price movements makes options more expensive.

• Once the outcome is revealed, uncertainty fades, and the options that were highly priced can quickly lose their value, even if the price movement direction aligns with your prediction.

Why IV Crush Matters

• For Option Buyers:
  Even if you correctly predict the price movement, you may still lose money due to the rapid depreciation caused by IV Crush.

• For Option Sellers:
  IV Crush can work in your favor, allowing you to quickly lock in profits.