Trading Momentum into Earnings Optimism With Options in Pinnacle Financial Partners Inc – CML News

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PREFACE
There is a powerful pattern of optimism and momentum in Pinnacle Financial Partners Inc (NASDAQ:PNFP) stock right before of earnings, and we can capture that pattern by looking at returns in the option market. The strategy won’t work forever, and in fact, it hasn’t even won more often than it has lost, but since this strategy has a celever risk control, the winning trades are so much larger than the losing trades, that it has returned 740% annualized returns.

PREMISE
The premise is simple — one of the least recognized but most important phenomena surrounding this bull market is the amount of optimism, or upward momentum, that sets in the two-weeks before an earnings announcement. Now we can see it in Pinnacle Financial Partners Inc.