Trading SQ

The combined data points are enough to interpret that the ticker is bullish, with institutions placing a highly leveraged bet on a positive earnings surprise.

Trade with a Stop Loss

This one seems worth entering, but we should definitely enter with a stop-loss, especially if we’re trading through earnings, which we typically don’t recommend.

There's always an element of unpredictability in the markets, so no matter how bullish a forecast looks, it's never guaranteed to play out.

That's where stop losses are key.

Implied Volatility

One last piece of advice we find very helpful when picking a contract is looking at implied volatility.

It's incredibly important for very short-term positions like day trading, as you're really just trading time value.

If implied volatility is too high, the contract will have a much harder time gaining value, as there is little "upside" left.

Implied vol is the main driver of intraday value and tends to "cap" at a certain level.

So, if the implied volatility is already close to that level, it doesn't have much room to rise.

This trade was obviously in the past, so what happened?