AAPL, META, AMZN and the ODTE tidal wave is coming to a trading screen near you

BY ANDREW GIOVINAZZI

February 2, 2024

Yo Pit Crazies,

You got a shot for the 0DTE Feb love child starring Mark and Licia. Get your seats while it is still open.

Do earnings affect 0DTE trading? Well…

Apple Inc (Ticker: AAPL) finally had some sales growth but that was not enough to move the stock after hours.

Meta Platforms, Inc (Ticker: META) and Amazon.com Inc (Ticker: AMZN) were another story.

The Lift on META was flat out crazy but is joining the other names that whispered AI into some big bucks.

Super Micro Computer Inc (Ticker: SMCI) with a $100 point move comes to mind as well and Advanced Micro Devices (Ticker: AMD) jumped $30 in Jan alone before their earnings number.

0DTE trading is really jumping onto a 1 day freight train. Something has to power the train.

Let’s see what that is.

FOMO is a powerful tool in the momentum arsenal

Earnings from Big Tech are now running a string of success. The folks who did not buy META last year for $80 are jumping in for $355 that is what Fear Of Missing Out Means. Ultimately stocks love big earnings and they are happening as we speak. That makes intraday trends very strong and makes options with explosive gamma like 0DTE options perform better than other options.

Gamma is how the value of an option changes with a $1 move in the underlying and Long Gamma makes an options value change exponentially.

That also keeps the volatility of the option up since the values change so fast. That is why I bought some VIX call spreads and S&P 500 Trust ETF (Ticker: SPY) call calendars struck at 500 in OP Mentoring on Thursday. I did not know earnings would blow out Thursday night, but I had a feeling after the momentum going into Thursday’s close. The VIX call spread is a cheap hedge in case I was wrong.

SPY had a $9 day Thursday and a $9 day on Wednesday. Can it have one today? If so it will be a nice day for the 0DTE crowd.

Buckle up.

To Your Trading Success,

-AG