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Betting On A Stock That Plummeted Post-Earnings: Trying To Avoid Repeating Two Big Mistakes

Benzinga ·  Jun 18 22:16

The Risk Of Buying After A Post-Earnings Drop

Everyone likes a bargain, so it's tempting to bet on a once high-flying stock when it drops post-earnings. We did that with two stocks in the first quarter,Snowflake, Inc.(NYSE:SNOW) andLululemon Athletica, Inc.(NASDAQ:LULU). Both posted double beats (on earnings and revenues), and both tanked after earnings: LULU by 16%, and SNOW by about 18%. We placed bullish options bets on both of them set to expire after their earnings this quarter.

Both of those options trades are going to expire worthless this Friday, even though...

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