So here we are again, staring down another earnings week, and if you're anything like me, you're not just looking at numbers on a screen -- you're reading the rhythm, the breath of the market itself.
Most traders chase the breakout. They see Tesla with a $24 expected move and start dreaming about catching lightning. They want the excitement, the adrenaline rush of riding price to extremes.
I do the opposite. I sell where they buy.
Here's why that edge prints money: when everyone's betting on extremes, fair price becomes a magnet. It's not random. It's balance. It's the crowd doing what it always does -- revert to where it's comfortable.
Last week proved this perfectly...
Tesla had that $24 expected move before earnings. The crowd was positioning for fireworks. But I anchored my monkey bars, found the 50% level, and mapped it out. Guess where price went? Fair. Price. Over and over again.
This isn't about being contrarian for the sake of it. This is about math. When implied volatility gets rich at extremes, that's not opportunity -- that's overpricing. When the expected move says Tesla might hit 161, that's where I'm selling premium, not buying it.
Take this week's setup on Procter & Gamble. Fair price sits around 153. Expected move suggests maybe 161 on the topside. Everyone wants to know if it'll run. I'm looking at that 161 level thinking: "That's an extreme. That's where I sell."
PG isn't known for huge volatility explosions. This is a chance to structure a low-risk setup where the odds say I win 76% of the time -- and I only need to be right 67% to profit. There's my edge.
Same logic applies to PayPal. Sitting at fair price, implied vol is rich. I can structure a calendar up at 83, keep my risk around 95 bucks, and the stats say I win 85% of the time. I'm not asking for perfection. I'm asking for probability.
The process never changes: high, low, 50% level, skew, project forward. We're not reinventing anything. We're following distributions. And if you've got the discipline to see that through, suddenly the chop doesn't feel like noise -- it feels like setup.
You can fade extremes, you can structure verticals, you can build calendars -- but none of that matters if you're just placing trades for excitement. I'm looking to fade the high IV where fair price isn't, sell premium that should disappear, and buy at the point where I see balance setting up.
This isn't flashy. It's not about being right every time. It's about putting yourself in the position to win more often than you lose, and letting the math do the work.
Like I always say: boring is beautiful when boring pays.
By Blake Young