This signal only flashes when the pros are too sure of themselves
Today we’ve got another mean reversion cash machine trade — and this one’s on Circle Internet Group (CRCL).
Unless you’ve been under a rock, you know it’s one of 2025’s hottest IPOs, riding the twin waves of crypto and AI hype.
Earnings drop tomorrow morning, and with a stock this volatile, we can expect even more fireworks after the numbers hit.
Direction Doesn’t Matter
Instead of trying to guess whether CRCL will rip higher or crater, I’m setting up a bi-directional debit spread.
That’s just a four-leg trade where you buy and sell options on both sides, so you can profit from a big move up or down.
Here’s the structure:
I’m buying the $160 call and the $160 put (right at the money with the stock trading near $161)
Then I’m selling the $170 call, and selling the $150 put.
These all expire at the end of this week, August 15.
The setup costs about $8.50 per contract, with a max profit of $1.50 if we hit our target move of at least 6%.
Why This Works
For this trade to be 100% profitable, we only need a 6% move in either direction.
In a stock like CRCL, that’s nothing — post-earnings, it could easily swing 30%.
And here’s the kicker: traders love this stock. Passion in the market usually translates into volatility. And volatility is exactly what this trade feeds on.
The Plan
We don’t need to overcomplicate it. Once I set up the trade as I said above, I wait for earnings to be announced Tuesday morning before market open.
Once earnings hit, I’m expecting the market to move the stock at least 6% in either direction.
The way we’ve set up this trade, it doesn’t matter if the stock skyrockets or tanks — as long as it moves.
As I mentioned, that’s nothing for a volatile stock like CRCL — especially around earnings.
As long as we see that kind of move, we could see full profit almost immediately once markets open.
Talk soon,
JD
The Rational Trader
