Oracle reports earnings next week. Michael Khouw has a plan to play it. You do not have a plan. You have a Robinhood account and a belief that watching CNBC counts as research.
The AI trade faces a test, according to people who write headlines for a living. Oracle sells database software and cloud infrastructure. Larry Ellison is very rich. These facts will not change based on whether the stock goes up or down on Tuesday.
Khouw trades options professionally. He understands implied volatility, skew, and how to structure a position that makes money in multiple scenarios. You understand that calls go up when the stock goes up. This is why Khouw drives a car that costs more than your parents' house and you're trying to decide if you can afford the Hulu ad-free tier.
The article does not say what Khouw's actual play is. Could be a call spread. Could be an iron condor. Could be selling puts to morons who think Oracle is going to miss by forty percent because they read a Reddit post written by a teenager in Manitoba. The specific strategy does not matter because you will not execute it correctly anyway.
You will buy calls on Friday afternoon. Oracle will beat earnings and raise guidance. The stock will open down three percent because the guide wasn't good enough for the seventeen analysts who get paid to move goalposts. You will panic sell at a loss. Khouw will close his position for a profit because he structured it like someone who has seen this movie four hundred times.
The AI trade faces a test. The test is whether people who don't know what they're doing can resist the urge to light money on fire based on a headline they saw while scrolling on the toilet. Spoiler: they cannot.
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