Overnight Profits In Semis

Hey 5-Star Trader,

“Tuesday Trade” Journal: One of the most important concepts in trading is to review your work, and learn from the good and the bad. Identifying what is working is critical — to do more of it. So, to lead by example, each Tuesday, you’ll get a trade from my trading journal, in which I explain my thought process from start to finish. Trading is all about finding something that works, and applying it over and over again. That’s how you find trading success. So study up on this “Tuesday Trade” and let’s get to work.

For this week’s “Tuesday Trade,” I want to outline my trade in Marvell Technology (MRVL).

Not to be confused with superheroes, MRVL is an American company that specializes in the development and production of semiconductors. Last week, they were set to report their earnings and I knew I wanted in on the overnight action right before they released their numbers.

On August 26, I sold two iron condors of MRVL — SELL -2 IRON CONDOR MRVL 100 (Weeklys) 27 AUG 21 63/68/63/58 CALL/PUT @3.21 limit order (LMT).

The idea behind this trade was to cash in on MRVL implied volatility (IV). If everything went according to plan, there would be an overnight volatility crush and theta decay. If this were to happen, I could come back the next day and buy back MRVL for a 30-50% profit on the credit.

Pictured below is my entry for MRVL:

Because this was an earnings report trade, the move would have to happen overnight, making this a riskier trade overall. The total risk I was taking on was 1.2%.

The very next day, near market open, I was able to buy back MRVL for a profit — BUY +2 IRON CONDOR MRVL 100 (Weeklys) 27 AUG 21 63/68/63/58 CALL/PUT @2.06 LMT.

I love trading overnight moves because of how fast you can get results but, always remember to mind your risk!

Want to learn how to trade earnings? Take my “Quarterly Profits” course. There I will teach you the building blocks behind every earnings trade I take.

Up Next...

Using Butterflies to Short Stocks

Market Volatility Market volatility has picked up, meaning there are more downside opportunities than before. When the market starts pulling back, I always try to quantify if it’s a normal “buy the dip” opportunity or if it’s a little bit deeper of a move that means it’s time to short some stocks. Identifying Bearish Alignment … Read more

Read More

Critical Stock Market Red Flags

With earnings season just beginning, we are entering the most risky time frame for the stock market. Netflix earnings week is already kicking off with a bang. The Nasdaq sold off yesterday, ending the day down -1.67%, with critical stocks like Tesla down -5.59%, Microsoft down -1.97%, and Meta down -2.28%. This occurred after escalating … Read more

Read More

Using Conservative Sell Signals To Exit

Hey traders! In this week’s trade review video, I discuss the conservative signals I had that caused me to take a cautious profit on Amazon. Sometimes I’ll take conservative profits, especially in a case like before CPI data when a news-related event is upcoming. Now, of course, if you take conservative profits, you cannot capitalize … Read more

Read More

Subscribe Today!

Want my up-to-date analysis, setups, top trading tips, and more? Be a Five Star trader, and join my free newsletter today!

Sign Up Now