Options Positioning Can Override Earnings Results - Advanced Topics
As for the advanced topics this year, I also want to build up “The Learning Academy”. That means that some weeks, I will provide an educational piece of content available only to advanced-topic members.
How to Read Options Positioning Before Earnings: A Micron Case Study
What you’ll learn: How to use the options market — implied volatility, expected moves, gamma exposure, and delta positioning — to forecast where a stock is likely to trade after it reports earnings.
What you’ll take away: A repeatable, step-by-step framework you can apply before any major earnings event to identify key price levels, understand market maker behavior, and avoid common traps that cost options buyers money.
Why Options Positioning Matters More Than Your Price Target
Most investors approach earnings with a simple question: Will the stock go up or down?
That’s the wrong question.
The better question is: where is the stock likely to get stuck — and what happens when the crowd gets it wrong?
The options market leaves fingerprints everywhere. Implied volatility tells you how much movement is priced in. Gamma exposure tells you where market makers will buy and sell. Delta positioning tells you where the pressure points are. If you learn to read these signals and understand the mechanics that will drive price action after the number drops, it can, at times, end up mattering much more.
We’re going to walk through this using Micron Technology (MU) ahead of its March 18th fiscal Q2 2026 earnings report — a stock where the positioning screamed danger even as the fundamentals screamed perfection. And then we’ll show you what actually happened.
The Setup: Stellar Expectations Across the Board
Going into the report, Micron appeared to be priced for perfection. Analysts expected:
EPS: $9.21 (more than doubling year-over-year)
Revenue: $19.9 billion
Q3 Guidance: $11.70 EPS, $23.8 billion in revenue
Gross margins expected to climb from 56.8% to 68.2% in Q2, then 70.7% in Q3
By every traditional measure, the outlook was strong. And that was the problem — because the options market was telling a completely different story about what would happen to the stock.
Step 1: Check Implied Volatility — The First Warning Sign
The first thing to examine before any earnings event is the implied volatility of the option closest to the report date. For Micron reporting on March 18th, that meant the March 20th weekly expiration.