Hey trader,
What if you could predict earnings moves before the announcement?
Wouldn’t that be grand?
It turns out, I might have a way to do that without magic.
These days, options drive stocks, not the other way around. Yet, the average trader doesn’t bother moving beyond a price chart.
They don’t realize how much information they are missing.
Today, we’re going to take a stroll through SOFI’s latest earnings. Because it turns out the options market may have predicted the stock’s move BEFORE the first tick landed.
Now, to give you a sneak preview, let’s dig into SOFI and see how options became our crystal ball.
The print that landed a day before the report
SOFI reported Wednesday morning before the open.
But…the information I care about most showed up the day before that.
On the August expiration, 100,000 contracts traded at the $18.50 strike. They were bought.
I know they were bought because the Console showed those fills coming in near the ask. Paying up into the ask tells me the buyer wanted the position badly enough to give up edge on entry.
Those contracts did not appear out of nowhere. They were rolled down from the $20 strike.
Essentially, the same size closed out a far away position. It reopened much closer to where the stock was actually trading.
What a print like that actually predicts
A big print will not tell you what the earnings number is going to be. No amount of option flow reveals the revenue line ahead of the press release.
What it does tell you is where the move accelerates. That is a different question, and it happens to be the one that pays.
My sequence starts with the gamma regime. Levels come second.
I want to see negative gamma.
That means the dealer buys strength and sells weakness, which carries a move further along instead of absorbing it.
A strike holding 100,000 bought contracts turns $18.50 into a magnet that draws price toward it.
However, the real payoff sits just past the magnet.
Breaking through that level produces a gamma squeeze.
When a short squeeze rides along with it, those moves arrive at a frequency well outside anything a standard deviation would predict. Implied volatility never gets them priced in properly.
The $1.50 the market had already agreed on
Here is the piece a price chart will never hand you.
The expected move going into this report was $1.50.
We were trading right at that expected move this morning. The options market called the size of this move before the first tick landed.
Direction is where my own trade came up short. I was positioned bullish the day before the report.
That side needed SOFI above $18. We never got there.
Two days remain to expiration after today. Getting north of 18 from here is very unlikely, which is the honest scorecard on this one.
Had we broken $18, then $18.50, the upside was massive. The path opened toward $20 on a name that instead spent the whole session sitting inside its expected move.
That SOFI print never showed up on a chart first…
It showed up on the Block Hunter surveillance Console, the tool I use to catch a block the moment it crosses and read whether it’s a roll, a fresh buy, or size quietly sliding closer to the money.
This is the work I do inside Block Hunter.
I take the prints as they cross, translate them into gamma exposure and levels, then walk them into real trades, the same path I just took on SOFI.
Earnings season is where this shows up hardest. The report decides the direction. The print already told me the size of the move and the level that mattered.
If you want to learn to read the block before the move reaches the chart, that’s where I teach it.
Click Here to Learn More About How You Can Join Block Hunter
Brandon Chapman, CMT
Creator of Ghost Prints
