u/notyour_averagebimbo

Goldman Sachs reports Tuesday before the open. It closed Friday at $895, 22% below its record close of $1,152 on July 15, the day after its last report.

How the stock moved on the last four report days:
•    July 14: up 9%. Record quarter, EPS of $20.98 against the $14.47 analysts expected
•    April 13: down 2%
•    January 15: up 5%
•    October 14 last year: down 2%

Goldman has beaten estimates 12 reports in a row, and the stock rose on the day 8 of those 12 times. JPMorgan, Wells Fargo and Citi report the same morning, and none of them rose on report day more often than they fell.

What's different this time: on September 16 its CEO said trading would be slightly softer this quarter. The stock fell 4% that day and hasn't recovered. Options are pricing about a 4.6% move through Friday.

Analysts expect $12.86 a share. Buying before Tuesday, or waiting for the number?

SemiAnalysis went after IREN on Wednesday. In posts on X, it said users call IREN's British Columbia data centers "The #1 worst site in the industry," citing "multi-day power outages, network upgrades, storage failures." IREN is down about 14% in two days, and the whole neocloud group fell with it today.

Here's what I think people are missing:
• The criticism is about the Canadian sites. SemiAnalysis said IREN's Texas campuses "look much better."
• Microsoft's $9.7 billion contract with IREN runs at Childress, Texas, one of those Texas campuses.
• SemiAnalysis expects Nvidia's planned $2.1 billion investment in IREN to help it "cut fewer corners."
• CoreWeave and Nebius had no company news of their own today. Their drop lines up with the 10-year yield near a 24-year high, not with anything SemiAnalysis said.

And someone is already buying it. At 12:43 today, with IREN near $36, someone paid about $2 million for next week's IREN calls at the ask, in one second.

Overreaction, or is SemiAnalysis right? Anyone scooping on this dip or do you think the OpenAI revenue “shock” will drive things lower?

Big week ahead. Here's what options are pricing for the five biggest things.

- Tuesday: Paramount's Warner Bros. Discovery deal should close. Each WBD share becomes ~$31.02 cash, so options price basically no move and calls above that are headed to zero.
- Wednesday: A 10-year Treasury sale with the yield at ~5.28%, then minutes from the Fed's September hike. The long-bond ETF TLT is priced for a ~1.6% week, twice its usual.
- Thursday: PepsiCo reports near its lowest close since April 2020. Options price ~3.7%, about its average on the last four reports.
- Thursday close: Index funds have to buy Moderna before it joins the Nasdaq-100 Friday. Up ~6x this year, it's priced for ~8% this week.
- Friday: Delta is the first airline to report with Brent oil back above $100. Options price ~6.5%. It opened up 8% and 11% on two of its last four reports and still never closed beyond its priced move!

Which one are you trading?

GameStop has closed higher five weeks in a row. It's up 38% since late August.

Say you bought the weekly call nearest the stock price each Friday.

Per contract
- Sep 4, up 7%: $30 became $116
- Sep 11, up 10%: $78 became $215
- Sep 18, up 7%: $58 became $164
- Sep 25, up 3%: $60 became $89
- Oct 2, up 6%: $67 became $120

In four of those weeks, most calls open on expiration morning still finished out of the money. Friday's biggest pile was at $25. GameStop closed 30 cents under it.

Before buying a weekly, add what you pay to the strike. Has the stock moved that far in a week?

Anyone buying weeklies through this run? Did yours pay?

GameStop has about 59 million warrants that expire on October 30. Each one lets you buy a share at $32. If every warrant is used, GameStop raises about $1.9 billion.

GameStop closed Thursday at $24.11. Here's what the same bet cost two ways at Thursday's close:
- The warrant: about $2.15
- A regular $32 call expiring October 30: about 35 cents

Same strike, same day, about six times the price. Options traders give GameStop about a 1 in 11 chance of finishing above $32 by then.
Part of the gap is that the warrants are hard to short, so it can last. But if you hold them, check the listed call before you add more.

Anyone still holding the warrants? Do you think they could explode in value?

Micron reported after the close, and it beat:

•    Revenue: $54.2 billion, vs $51.3 billion expected
•    Next quarter's guidance: $61.5 billion

Going into the report, options expiring Friday were pricing about a 7.4% move either way. In the first five minutes after hours, the stock swung from down about 2% to up about 1%.

A beat this big doesn't guarantee a big move. After 4 of its last 8 reports, Micron moved more than options had priced. After the other 4, it moved less.

Is this one already priced in, or does it run tomorrow? THE NUMBERS ARE INSANE!

Ryan Cohen, GameStop's CEO, bought more GameStop stock yesterday. It's his third buy in three weeks, and he paid more each time:

•    Sep 10: $20.4 million at $20.38 a share
•    Sep 21: $26.4 million at $22.94
•    Sep 29: $10.6 million at $23.48

That's $57.3 million in three weeks.

Here's the part that stood out. His filing last night says he has paid $185.5 million for all the GameStop stock he owns. So almost a third of everything he has ever put in went in this month.

It also puts his average cost at about $4.53 a share. He's now buying at five times that. Options traders are on his side too. About 4 calls are open for every put.

Would you keep buying at five times your cost?

FICO, the company behind the credit score most lenders use, fell 27% today. Fannie Mae and Freddie Mac are moving to one mortgage pricing grid that treats VantageScore the same as FICO, which takes away the reason most lenders defaulted to FICO. It's FICO's worst day since at least 2017, worse than any day of the 2020 crash, and the stock is now down 65% from its high last December.

You'd expect the options market to be panicking after that. It isn't. On Monday, options expiring October 16 were pricing about a 9.5% move either way. Tonight, after a 27% drop, they're pricing 10.5%. A put that protects you from any further drop through October 16 costs about 5.5% of the stock's price.

That's the check worth running after any crash: compare the expected move before and after. If it barely changes, the market thinks the big news is already in the price. If it jumps, traders think there's more coming.

Anyone here work in mortgages? Will lenders actually switch to VantageScore, or does FICO stay the default anyway?

OpenAI's yearly revenue pace is nearing $70 billion, Axios reported this morning, and its sales to businesses more than doubled since July.

Oracle has a lot riding on that. A year ago OpenAI agreed to buy about $300 billion of computing power from Oracle over five years, around $60 billion a year. Oracle closed at a record $328 the day that deal came out. The worry since then has been whether OpenAI could ever pay for it.

OpenAI's revenue pace is now bigger than what that deal averages per year. It has other big computing bills too, so it doesn't settle the question, but Oracle jumped from $135 to $142 right after the report.

Is this the turn for Oracle, or does OpenAI need to show a profit first?

Chip stocks ripped today. Intel jumped 12%.

So I went back through last week's Intel options trades and found this. Last Wednesday someone sold a big block of October calls with a $130 strike and collected about $2 million. It was a new position, and Intel was nowhere near $130 at the time. It looked like easy income.

Three trading days later, Intel is up about 20%, and buying those calls back would cost about $11 million.

Shrink it to one contract and it's a trade a lot of people make every week. You collect $105 for a call that looks too far away to matter. Now it costs $585 to get out. If you own the shares, you're fine. If you don't, you're short Intel into a rally.

The point is, a far away strike does not mean a trade is safe. It means it’s cheap. Always keep this in mind!

Analysts at Rothschild put a Sell rating on CoreWeave (and NBIS) this morning with a $54 price target. The stock closed Friday at $81.36, so that's a call for a 34% drop. Their reasoning is that credit markets are pricing in risk the stock is ignoring. The stock is up 3% today anyway.

I found this in last week's options trades. Thursday at 10 am, someone bought 14,000 November puts with a $47.50 strike in a single trade. Extremely OTM. Whoever bought has not closed.

CoreWeave announced a $3 billion convertible bond sale that same day, so this could be someone hedging that deal. Or it's a straight bet on a bigger drop than Rothschild is calling for.

Hedge or bet?

I’m over here trying to figure out if 20% of my account is too much to risk. Meanwhile some of you guys are throwing tens of thousands of dollars at a stock that moves 5-15% in a day! Are you gambling or just believe so deeply in this mission that it’s worth everything you have?

HOW DO YOU GUYS NOT THROW UP??