LRCX
Lam Research Corp
stock NASDAQ

LRCX

LRCX

Fuck you AMAT! LRCX popped after earning and this turd? Worse than Cisco

POET, LRCX, COHR, ESTC, ALAB,

The piece missing from your EV math is that the 130 to 160 percent payoff is not free edge, it is the market handing you back its own probability estimate. A defined risk call spread that pays 1.5x on a correct directional call is priced that way precisely because the chain assigns roughly 40 percent odds to finishing there. So "coin flip direction" is already too generous. You are being paid 1.5 to 1 on something the market thinks is closer to 40/60, not 50/50.
Two other leaks. First, IV crush. Going into the print you are long vega on that spread, and the collapse in implied vol after earnings pulls value out even when the direction is right but the move is modest, so your real breakeven move is larger than the strikes look. Second, the implied move already contains the fat tail. The names where these spreads look easy, LITE, NBIS, LRCX, are exactly the ones with the widest implied moves, which is why the near strikes are cheap in the first place.
Positive expectancy here does not come from the payoff shape. It comes from having a real edge on the magnitude distribution versus what is implied, not on direction. If you cannot say why the realized move will beat the implied move on a given name, the structure alone is a fair bet with commissions and slippage leaning against you.

Hi,
I've recently started experimenting with call spreads around earnings for AI-related stocks. Yes, yes, I know — earnings are basically a casino, etc. — but let's focus on the actual risk/reward.
What I've noticed is that it's relatively easy to construct a defined-risk call spread where a strong earnings reaction can produce a **130–160%+ return on the maximum amount at risk**, without requiring some completely ridiculous move in the underlying.
I had one work very well on LITE recently, but looking back, similar setups would also have worked on quite a few other popular names — NBIS and LRCX being good examples.
So even if we assume that predicting the direction of the earnings move is basically a coin flip, I'm wondering whether the payoff structure itself can create a positive expectancy.
You can often build a spread where a correct directional call returns 130–160% of the capital at risk, while the maximum loss is predefined. I'm deliberately not talking about ultra-aggressive lottery-ticket spreads here — I'd rather keep the strikes somewhere within or around the implied earnings move.
Has anyone here systematically traded earnings this way or backtested something similar? Is there something I'm missing in the expected-value calculation?
\--AI translation from other language - although I am quite fluent English speaker, I have originally published that in my native polish language on local FB forum--

People chasing SNDK
But I’m chasing LRCX. Literally perfect inverse h&s pattern, the cleanest I’ve seen all year.