In this market beating earnings means nothing as we’ve seen consistently with tech stocks. As I posted above, DOCU consistently beat the street’s estimates, but trades down quite considerably the next trading day.
Guidance is all that matters, the fact that DOCU traced so far up IMO meant prime target for profit taking. Unfortunately the spreads were a bit ridiculous and nothing filled for me. IV was trading at +350% for 0 DTE options, too risky for me.
I’ll look for a bounce back on Monday and enter a position once IV dies down betting on rate hikes and sell off of the broader market given the bull run we’ve had in the past two weeks.
Damn. Congratulations Squishi for this fundamental analysis on DOCU. Hopefully you will continue to provide scolar lvl DD on your future plays and projects!
But seeing how I thought the estimate numbers were an easy beat / easy guide up, and they beat by only a little and guidance was basically only in line, I’m sure other people were expecting a larger beat / guide up and that didn’t happen.
Hey all, holding DOCU puts and am quite happy. I’d like to point out that if we take a look at previous DOCU earnings, it dumped after market open even more.
On 3/11 it opened at $77 and bottomed out at $70.
On 3/21 it opened at 155 dumped immediatley to 136.70 within 30 minutes. It slowly bled to 131 the rest of the day.
Just pointing this out that if you are not in DOCU, i believe there is still big money to be made playing DOCU puts tomorrow. Especially if CPI is bad and SPY shits the bed. Best of luck to all!
For this kind of trade, keep in mind (that if you have an account permitting you to do this), you can hedge your position in after hours on a big move.
Say you bought 70Ps for a buck
Stock is trading at 67 in after hours, you buy 50 shares per put contract that you have @ 67
You’ve now locked in a gain.
If the after hours move reverses (and this happens very frequently) and it bounces back over 70, your put’s now worthless, but your shares are worth even more than the strike and you can sell for a gain.
If it declines more, the unhedged half of the put will continue appreciating in value.