DocuSign, Inc. (DOCU) is trending in the news and social media after the company announced earnings yesterday after the DocuSign, Inc. (DOCU) is trending in the news and social media after the company announced earnings yesterday after the market closed. The company beat earnings estimates but gave guidance on future billing growth that investors didn’t like. The stock is down in pre-open trading. In the chart below you can see marked periods where the stock dropped more than 14% the day after the company released their earnings report. These big one-day drops all happened as the COVID bubble unwound. Volatility expectations were high going into this earnings report, and even though the stock beat estimates and added a billion dollars to their current stock buyback program, the stock is down because investors did not like the future guidance. Volatility expectations remain high this morning. You can see in this table the only times DOCU has dropped more than 14% the day after earnings occurred during the period when the COVID bubble was unwinding. Only 2 of those drops dropped beyond the strike price percent of our current trade idea from open to close the day after earnings. This tells us that our current trade idea in real trading history is very much a high-probability trade. The past events that would potentially cause the trade to lose are unlikely to repeat in the next few hours.
[Get great trades every day--Click here]( This MDM graph compares the modeled expectations of current options prices (the orange line) to the actual movement of DOCU’s stock price over the past year. You can see that the actual behavior (the blue histogram) looks nothing like the current modeled options prices expect. This tells us that current options prices are ridiculously expensive relative to the past movement of the stock. This [Volatility Term Structure]( shows that options expiring today have extremely high volatility expectations compared to every other expiration. To learn more about Volatility Term Structure, click [here]( This shows us that selling expensive options for today’s expiration gives us a clear advantage. DOCU beat earnings estimates but gave future guidance that investors did not like. The stock is down in pre-open trading, and volatility expectations are extremely high. We can exploit the current situation with a limited-risk, high-probability credit spread strategy. Be sure to read the ODDS Online Daily Trade Idea report to get the details of our trade idea for selling expensive DOCU options today. To access Odds Online Daily and be able to see any stock you are tracking in this software, click [here](. Thank you, Don Fishback --------------------------------------------------------------- See Related Articles on [TradewinsDaily.com]( [DocuSign, Inc. (DOCU), Trending Stock Report]( [I Was Wrong–But It Creates A Buying Opportunity]( [How To Make Trading Timing Work For You]( [Power Up Your Portfolio with NextEra?]( [Gentex Corp. (GNTX), Trending Stock Report]( ---------------------------------------------------------------
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