Hi Marty -

Hope all is well.  What are your thoughts on trading BROS into earnings with proper cushion?  Thanks, Charles

Charles,

I have a formula that has kept me mostly out of trouble Lon earnings report. Of course nothing is foolproof!  I take the worst down day in the past year and add a 5% stop loss. If I do not have that size of a cushion then I make some adjustments.

BROS worst day in the past year was a 10% drawdown on April 4. I would add a 5% stop loss and require at least a 15% cushion into an earnings report.

I own it and will continue to do so until the story changes. They are taking market share and growing rapidly. The stock price has not participated in the rally since April 7.

The market right now wants all things artificial intelligence. They want the hardware, software, data centers, connectors, coolers, construction and everything related to the artificial intelligence revolution. Unfortunately, that means BROS will likely pop on a strong earnings report and fade thereafter.

I have bought November 21 $70 calls and will sell the calls if the pops and keep my shares. I only bet what I can afford to lose when it comes to options and  earnings reports.

Good Luck!

Marty