In this series, I would like to focus on the best strategies for playing earnings. My goal is to provide you with safe strategies so risk management is essential. - Risk Management: Don't risk more than 1% of your capital on each earnings trade. Initially even paper trade these till you become confident. - Expected Move (EM) vs Actual Move (AM): If you add the ATM call and put prices, it gives you the expected move. For earnings calculating the expected move tells us how much the stock can move either side post earnings. But for earnings usually the actual moves are lower than the expected moves which is what we want to take advantage of - Stock Selection: You can goto a paid website like market chameleon or any others where they list the stocks EM vs AM history. Use this data to pick the stocks where historically the AM stayed under EM 70% of the time or higher. Pick stocks with good liquidity and enough history. - Strategy 1: On the day of earnings (15 min before market close), Sell a ATM call and ATM put and buy far OTM (say 5 delta) call and put. Close this 10-15 mins after market opens next day - Strategy 2: A much safer strategy. Sell call and put at 2 times EM. Say the EM says stock will move by 5%, then sell a call and put at 10% OTM. Then buy even farther out call and put. This will create a very safe Iron Condor. Close this 10-15 mins after market opens next day - Strategy 3: Safest strategy. See the stock's historical maximum single day drop percent and max single day increase %. Use these and sell call and put beyond these percent drops. Then buy even farther out call and put. This will create the safest Iron Condor. Close this 10-15 mins after market opens next day Feel free to ask me if you have any questions.

I am feeling very bullish about Baidu and Alibaba. To my mind, both appear to have a maturing bottom and a W pattern. Would this be a good time to purchase a call on either or both? Thoughts, please!

The term "business investment collapse" refers to a severe, rapid, and widespread decline in spending by businesses on capital goods that are essential for future production. This is a critical economic event with far-reaching consequences. Here’s a detailed breakdown of what it means, its causes, effects, and historical examples. What Constitutes a "Collapse"? It's more than just a slowdown or dip. A "collapse" implies: - Sharp Decline: A rapid and significant drop in investment spending, often measured quarter-over-quarter or year-over-year. - Broad-Based: The decline isn't confined to one sector (like tech or energy) but affects manufacturing, services, and construction simultaneously. - Loss of Confidence: It is driven by a profound pessimism about the future profitability of investments. Key Causes of a Business Investment Collapse Several factors can converge to cause a collapse in investment: 1. Sharp Rise in Uncertainty: This is the primary catalyst. Businesses hate uncertainty. When the future path of the economy is highly unpredictable, they delay or cancel investment plans. -Examples: The onset of a pandemic, a major geopolitical event (e.g., a war), political instability, or the threat of drastic regulatory changes. 2. Aggressive Tightening of Financial Conditions: -High Interest Rates: When central banks raise interest rates to combat inflation, the cost of borrowing for new factories, equipment, and technology increases. This makes potential investments less profitable. -Credit Crunch: If banks become risk-averse and stop lending (as during the 2008 financial crisis), even businesses that want to invest can't get the financing to do so. 3. Sharp Drop in Demand (Current and Expected): -If consumer demand plummets (e.g., during a deep recession), businesses see massive unused capacity in their existing factories and stores. There is no need to invest in expanding because they can't even use what they already have. -Expectations of weak future demand make any long-term investment seem unprofitable.

A recent comment from Elon Musk on AI: "I now think @xAI has a chance of reaching AGI with @Grok 5. Never thought that before...." What is AGI? AGI = “general-purpose AI.” It could learn any intellectual task a human can, across subjects from math to cooking to law to trading; and adapt without needing to be retrained for each new thing. AGI would have flexibility and reasoning abilities similar to humans, while today’s AI systems are still very specialized. Fun times ahead!!

Gold is on pace for its best year since 1979, up over 40% in 2025. Thanks to Charlie Bilello