Free Earnings Trade Idea

[] I want to give you a free, risk-controlled play on one of my favorite earnings plays: [] [] [] Free Earnings Trade Idea Hey folks, Happy Monday. Today, I want to give you a free, risk-controlled play on one of my favorite earnings plays: ARM. Now, as you have probably heard me say before: I love trading earnings, but I do it with much tighter risk and smaller size than my typical strategies. That’s why I want to start today’s letter by talking about risk. You see, on most trades I take, I actually use the price of the option itself as the stop loss — meaning, in simple terms, I am willing to lose 100% of the price I paid for the option. So, if the price of the option falls with time left on the option, my usual strategy guidelines tell me to keep it open and give it a chance to cross back into the positive direction or simply let it go to $0 if it never comes back. So why do I do this? Well, imagine if we are targeting $190 per share call on Apple with 14 days of time to work with... Within those 14 days, the underlying stock price will likely go up and down. There will be some fluctuations (remember, we have a call on Apple so we are bullish and think the share price will go up over that time period.) And what often happens with options is that they over-fluctuate during those volatile moments. Having a stop loss on the option is just begging for market makers to yank you out of the trade for a loss that still has a chance to win. For example, Apple might have a rough day and drop a few percent, the option could easily fluctuate by a huge amount even if the trade still looks viable to you. And if you have a stop loss, that means it will likely hit that level as the price jumps all around and pulls you out of the trade… Meanwhile, hours later, Apple could be ripping again. But this isn’t just theory… As we tested the Automated Options strategy over 5 years of data, it was extremely clear that a significant number of trades that “looked like losers” actually turned out to be winners. And, over time, that makes a huge difference in your overall equity curve. A core reason that simply staying in trades vs being taken out early is more profitable is because the market tends to go UP over time. That may seem like a very simple concept but it makes a huge impact when you dive into the data: [] We can see that evident in the S&P, Dow Jones, and Nasdaq Composite in the chart above. So if every day, historically speaking, the markets have a higher chance of going up than they do going down… Well, it makes a lot of sense to give a trade more days to try and go up to create a winner than to take a loss during the less common down days. And when the market really falls apart, I am extra glad that I can only lose 100% of my option! Now, some people think this means I am trading in a very risky way, but I tend to think in the exact opposite terms. Because I know I am willing to lose 100% of the position, I can set up my risk in advance and feel very comfortable with the outcome of the trade — even if it loses. Compare that to someone who buys a whole bunch of shares hoping an asset goes up and “plans on getting out of the trade if it doesn’t work out”... I’ve seen that story way too many times and they open themselves up to way, way more risk than the alternative path of building an option play withcontrolled risk and being willing to lose it all if they’re wrong. Let’s use ARM to consider this situation because that’s what I want to give you a free trade on today below. As you will see, the trade on ARM I am recommending costs about $30 a contract to put on. Meaning you can define your risk in increments of $30 if you want to follow this trade: 1 contract = $30 of risk 2 contracts = $60 of risk 10 contracts = $300 of risk And so on. On the flip side, the target is $70 per contract: 1 contract = $70 potential gain 2 contracts = $140 potential gain 10 contracts = $700 potential gain And so on. That’s a 233% potential gain on this setup. Let’s Do Some Math If the trade wins, we’ll make $70 per contract. And we need the stock to move about $8 to win. To make the same $70 on a $8 move in the stock you’d need 9 shares, which at the current share price of $107 will run you about $960 total. In short, that means you would be risking $960 to make $70 when buying the stock OR risking $30 to make $70 when using the option setup. So, the very same reward will cost you about 32x the risk if you bought shares instead. Now, you might say, “Sure, Nate, but I am not really risking the whole $960 on the shares…” And to that I would say “First of all, yes you are! That’s how risk works.” But even if you think the max risk is something like 50% of the shares and not 100%... Your risk is still 16x greater and you’re still tying up 32x more capital. And that’s precisely why I love these controlled options plays! Free Earnings Trade Now, let’s jump into that free earnings trade idea I promised you at the beginning of today’s newsletter. There’s one company in particular that I am bullish on this earnings season, and that’s Arm Holdings (ARM). ARM is a semiconductor and software design company known best for their CPU’s. They have the most popular CPU architecture in the world with over 250 billion chips shipped since the company's inception. So why do I like ARM? Well, ARM had one of the biggest earnings beats of the year so far in February and has over-corrected back to around $100 setting itself up for another big pop. There are BIG bullish orders coming in on ARM right now betting on higher prices, so it looks like some insiders are expecting a beat. And probably most importantly, chip stocks still have the most explosive potential of any sector in the market. ARM could miss and drop 20% just as easily, but that's why the controlled risk play makes so much sense. In other words, I like it for its risk-to-reward potential more than anything else! Here’s how we can play this: We're going to place a debit spread expiring on Friday, May 10th on ARM. To do this, we need to: • Buy to Open a May 10th $114 strike on ARM • Sell to Open a May 10th $115 strike on ARM These options are at about $0.30 right now which means they cost $30 per contract to buy each one. So, if our options hit, we will make roughly 230% as our gain. What we risk is our entire premium, so again: 1 contract = $30 of risk 2 contracts = $60 of risk 10 contracts = $300 of risk And so on. And, remember, we are targeting the same gain on an $8 move as the underlying shares would require over 30x the investment to target. And, in a nutshell, this is why I love options trading. — Nate Tucci [] To your trading success, Nate [] Free Earnings Trade Idea Hey folks, Happy Monday. Today, I want to give you a free, risk-controlled play on one of my favorite earnings plays: ARM. Now, as you have probably heard me say before: I love trading earnings, but I do it with much tighter risk and smaller size than my typical strategies. That’s why I want to start today’s letter by talking about risk. You see, on most trades I take, I actually use the price of the option itself as the stop loss — meaning, in simple terms, I am willing to lose 100% of the price I paid for the option. So, if the price of the option falls with time left on the option, my usual strategy guidelines tell me to keep it open and give it a chance to cross back into the positive direction or simply let it go to $0 if it never comes back. So why do I do this? Well, imagine if we are targeting $190 per share call on Apple with 14 days of time to work with... Within those 14 days, the underlying stock price will likely go up and down. There will be some fluctuations (remember, we have a call on Apple so we are bullish and think the share price will go up over that time period.) And what often happens with options is that they over-fluctuate during those volatile moments. Having a stop loss on the option is just begging for market makers to yank you out of the trade for a loss that still has a chance to win. For example, Apple might have a rough day and drop a few percent, the option could easily fluctuate by a huge amount even if the trade still looks viable to you. And if you have a stop loss, that means it will likely hit that level as the price jumps all around and pulls you out of the trade… Meanwhile, hours later, Apple could be ripping again. But this isn’t just theory… As we tested the Automated Options strategy over 5 years of data, it was extremely clear that a significant number of trades that “looked like losers” actually turned out to be winners. And, over time, that makes a huge difference in your overall equity curve. A core reason that simply staying in trades vs being taken out early is more profitable is because the market tends to go UP over time. That may seem like a very simple concept but it makes a huge impact when you dive into the data: [] We can see that evident in the S&P, Dow Jones, and Nasdaq Composite in the chart above. So if every day, historically speaking, the markets have a higher chance of going up than they do going down… Well, it makes a lot of sense to give a trade more days to try and go up to create a winner than to take a loss during the less common down days. And when the market really falls apart, I am extra glad that I can only lose 100% of my option! Now, some people think this means I am trading in a very risky way, but I tend to think in the exact opposite terms. Because I know I am willing to lose 100% of the position, I can set up my risk in advance and feel very comfortable with the outcome of the trade — even if it loses. Compare that to someone who buys a whole bunch of shares hoping an asset goes up and “plans on getting out of the trade if it doesn’t work out”... I’ve seen that story way too many times and they open themselves up to way, way more risk than the alternative path of building an option play withcontrolled risk and being willing to lose it all if they’re wrong. Let’s use ARM to consider this situation because that’s what I want to give you a free trade on today below. As you will see, the trade on ARM I am recommending costs about $30 a contract to put on. Meaning you can define your risk in increments of $30 if you want to follow this trade: 1 contract = $30 of risk 2 contracts = $60 of risk 10 contracts = $300 of risk And so on. On the flip side, the target is $70 per contract: 1 contract = $70 potential gain 2 contracts = $140 potential gain 10 contracts = $700 potential gain And so on. That’s a 233% potential gain on this setup. Let’s Do Some Math If the trade wins, we’ll make $70 per contract. And we need the stock to move about $8 to win. To make the same $70 on a $8 move in the stock you’d need 9 shares, which at the current share price of $107 will run you about $960 total. In short, that means you would be risking $960 to make $70 when buying the stock OR risking $30 to make $70 when using the option setup. So, the very same reward will cost you about 32x the risk if you bought shares instead. Now, you might say, “Sure, Nate, but I am not really risking the whole $960 on the shares…” And to that I would say “First of all, yes you are! That’s how risk works.” But even if you think the max risk is something like 50% of the shares and not 100%... Your risk is still 16x greater and you’re still tying up 32x more capital. And that’s precisely why I love these controlled options plays! Free Earnings Trade Now, let’s jump into that free earnings trade idea I promised you at the beginning of today’s newsletter. There’s one company in particular that I am bullish on this earnings season, and that’s Arm Holdings (ARM). ARM is a semiconductor and software design company known best for their CPU’s. They have the most popular CPU architecture in the world with over 250 billion chips shipped since the company's inception. So why do I like ARM? Well, ARM had one of the biggest earnings beats of the year so far in February and has over-corrected back to around $100 setting itself up for another big pop. There are BIG bullish orders coming in on ARM right now betting on higher prices, so it looks like some insiders are expecting a beat. And probably most importantly, chip stocks still have the most explosive potential of any sector in the market. ARM could miss and drop 20% just as easily, but that's why the controlled risk play makes so much sense. In other words, I like it for its risk-to-reward potential more than anything else! Here’s how we can play this: We're going to place a debit spread expiring on Friday, May 10th on ARM. To do this, we need to: - Buy to Open a May 10th $114 strike on ARM - Sell to Open a May 10th $115 strike on ARM These options are at about $0.30 right now which means they cost $30 per contract to buy each one. So, if our options hit, we will make roughly 230% as our gain. What we risk is our entire premium, so again: 1 contract = $30 of risk 2 contracts = $60 of risk 10 contracts = $300 of risk And so on. And, remember, we are targeting the same gain on an $8 move as the underlying shares would require over 30x the investment to target. And, in a nutshell, this is why I love options trading. — Nate Tucci [] To your trading success, Nate [] ABOUT US: We believe that the opportunity for financial literacy and freedom belongs to all people, not just those who already have years of investing experience. Jeffry Turnmire Trading provides an array of educational services and products that will help you navigate the markets and become a better investor. Trading is made simple through our online forum full of trading techniques to give you the best tools to kick-start your investing journey. We offer collaborative webinars and training; we love to teach. No matter the opportunity, we bring together a strong community of like-minded traders to focus on analyzing market news as it’s presented each day. DISCLAIMER: FOR INFORMATION PURPOSES ONLY. The materials presented from Jeffry Turnmire Trading are for your informational purposes only. Neither Jeffry Turnmire Trading nor its employees offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational purposes intended is at the user’s own risk. DISCLAIMER: TRADE AT YOUR OWN RISK; TRADING INVOLVES RISK OF LOSS; SEEK PROFESSIONAL ADVICE. Jeffry Turnmire Trading is not responsible for any losses that may occur from transactions effected based upon information or analysis contained in the presented. To the extent that you make use of the concepts with the presentation material, you are solely responsible for the applicable trading or investment decision. Trading activity, including options transactions, can involve the risk of loss, so use caution when entering any option transaction. You trade at your own risk, and it is recommended you consult with a financial advisor for investment, legal or tax advice relating to options transactions. Please visit [( for our full Terms and Conditions. [Unsubscribe]( This email was sent to {EMAIL} by Prosperity Pub 101 Marketside Ave, Suite 404 PMB 318, Ponte Vedra, Florida 32081, United States [Prosperity Pub]( [] ABOUT US: We believe that the opportunity for financial literacy and freedom belongs to all people, not just those who already have years of investing experience. Jeffry Turnmire Trading provides an array of educational services and products that will help you navigate the markets and become a better investor. Trading is made simple through our online forum full of trading techniques to give you the best tools to kick-start your investing journey. We offer collaborative webinars and training; we love to teach. No matter the opportunity, we bring together a strong community of like-minded traders to focus on analyzing market news as it’s presented each day. DISCLAIMER: FOR INFORMATION PURPOSES ONLY. The materials presented from Jeffry Turnmire Trading are for your informational purposes only. Neither Jeffry Turnmire Trading nor its employees offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational purposes intended is at the user’s own risk. DISCLAIMER: TRADE AT YOUR OWN RISK; TRADING INVOLVES RISK OF LOSS; SEEK PROFESSIONAL ADVICE. Jeffry Turnmire Trading is not responsible for any losses that may occur from transactions effected based upon information or analysis contained in the presented. To the extent that you make use of the concepts with the presentation material, you are solely responsible for the applicable trading or investment decision. Trading activity, including options transactions, can involve the risk of loss, so use caution when entering any option transaction. You trade at your own risk, and it is recommended you consult with a financial advisor for investment, legal or tax advice relating to options transactions. Please visit [( for our full Terms and Conditions. [Unsubscribe]( This email was sent to {EMAIL} by Prosperity Pub 101 Marketside Ave, Suite 404 PMB 318, Ponte Vedra, Florida 32081, United States [Prosperity Pub](