Trade Findings and Adjustments 01-26-2023

Trade Findings and Adjustments 01-26-23

Keve Bybee –


What are we looking at?

  • Earnings and rate hike decision on Wednesday
  • If we get a .25% rate hike market will continue higher
  • If we get a .50% rate hike the market will be surprised as it expects a .25% hike and stocks may fall
  • My feeling is that we will get a .50% bps hike as inflation hasn’t come down enough
  • Feb, March, May rate hikes coming up


BA – 1/25 earnings report

  • Missed numbers BUT sold a lot of planes
  • Should be cash flow positive this year


How do we protect for earnings?

  • Usually put protection on around 2 weeks before earnings unless the stock is having a great pre earnings run. Just to avoid volatility causing expensive options prices.
  • We will buy around 5 – 6 weeks of time to avoid time decay of options expiring in that month.
  • Typically buying ATM strike prices
  • Decide if we need to “roll up” the puts to higher strike prices if the stock has run up, or let them run.
  • IF we roll up, the math has to make sense: we need to be gaining more dollars per share that we are protecting than we are spending to buy a higher strike price.


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