Why I Bought AAP Options After Earnings (Not Before)

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"I buy calls expiring AFTER earnings instead of before. You get paid while you wait instead of watching time decay kill you."

Nate Bear, Lead Technical Tactician, Monument Traders Alliance

Nate Bear

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Every earnings season, I watch traders make the same expensive mistake.

They buy calls expiring the Friday after earnings, thinking they're being smart. Then earnings hit and their options get destroyed by volatility crush and time decay, even when the stock moves their way.

I do the exact opposite. And AAP just gave me the perfect setup to show you why.

The "Boring Month" That Led to Gold

September's sector analysis was brutal. After screening hundreds of charts, I had exactly one decent setup: Walmart. Again.

We made over 100% on Walmart last month, but when you're stuck with the same consumer staples ticker two months running, it gets stale.

So I started hunting outside the usual framework. That's when AAP jumped off the screen.

The "Woodpecker Pattern" Setup

 

AAP was sitting in textbook position. Daily squeeze building at the $65 pivot. Clean overhead target at $70-75. And here's what made this special: earnings on November 12th.

Most traders would grab November 15th calls - right after earnings. That's exactly backwards.

Premium Protection vs Time Decay

Here's what happens when you buy calls expiring after earnings instead of before:

Traditional Approach: Premium erodes daily → Volatility crush at earnings → Even winning moves lose money

Premium Protection: Slight erosion → Then premium EXPANDS into earnings → You get paid while you wait

When you buy options expiring after an earnings event, the premium follows what I call the "protection curve" - drops slightly, then actually rises as the announcement approaches.

The AAP Execution

I grabbed November 21st $65 calls.

Target: Break over $70 toward $72-75 (15% stock move = 100%+ option gain) Exit Strategy: Scale out before November 12th earnings Why it works: Premium expansion into earnings + clean technical breakout

The daily chart showed that "woodpecker pattern" - multiple tests creating pressure at $65. Once this breaks higher, there's nothing but air until mid-$70s.

Why This Beats Quick Strikes

When you buy options expiring right after earnings, you fight time decay every day. That brutal parabolic curve toward zero.

But buying options expiring after earnings? You can watch your option value increase even if the stock just sits there, thanks to volatility expansion.

The Anti-FOMO Strategy

I could have forced something earlier. XLP had a dozen mediocre names. But that's not how you make money consistently.

Sometimes the best strategy is waiting for the right setup, even if it means being bored for a month.

How to Apply Premium Protection

Next time you're eyeing an earnings play:

  1. Find strong technical setups with earnings 2-4 weeks out
  2. Buy calls expiring 1-2 weeks AFTER earnings
  3. Enter early for volatility expansion benefits
  4. Scale out profits before the announcement

You'll pay slightly more upfront, but you avoid the premium death spiral that kills most earnings trades.

Your Action Plan

AAP is working exactly as planned. Daily squeeze fired, initial push higher, and November 21st expiry gives me room to work.

The best part? You can be "wrong" on timing and still make money. As long as the technical setup eventually works and you have premium protection, time decay won't kill your position.

That's how you turn boring months into profitable ones.

If you want to follow more trade ideas, check out Daily Profits Live.

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