Late yesterday, I made a $12 bet on Navitas’ earnings.

This morning, NVTS opened up 22%, and I collected a $175 profit per 100 shares.

But here’s the thing – I was just as prepared to lose money as I was to make it.

The difference?

My $12 insurance policy meant I’d lose $100 instead of $300 if everything went sideways.

Most traders either win big or get their faces ripped off during earnings. I found a way to win big or lose small.

What Actually Happened Behind the Scenes

Tuesday afternoon, NVTS was trading around $8. Earnings were after the bell.

I owned shares, but I was aware that the reaction would be volatile. This thing could gap up… or crater at the open. The implied move was in the double-digits, meaning big swings either direction.

So I bought insurance: $7 puts for $0.12 each. That’s $12 out of my pocket (since one options contract represent 100 shares).

If NVTS dropped to $5, I’d lose $3 per share. But my puts would gain $2.

That means I’d lose just $100 per 100 shares.

If NVTS rocketed higher – which is what happened – I’d lose my $12 insurance premium… while my shares soared.

This morning: NVTS at $10. Puts expired worthless. I was up $200 per 100 shares.

Cost of insurance: $12. Net profit: $188 per 100 shares.

The Real Math of Not Getting Destroyed

Now, I’m not pretending that married puts eliminates losses. They don’t.

Had NVTS tanked, I still would have lost money. The beauty is HOW MUCH I’d have lost.

That $200 difference? That’s the difference between “ouch, that hurt” and “I’m never trading again.”

Plus, I’d have put profits to average down on NVTS at better prices instead of panic-selling at the bottom like everyone else.

Why This Beats Pure Gambling

Most earnings plays are binary. You’re either right and make money… or wrong and get crushed.

Married puts give you three outcomes:

1. Stock goes up: You make good money minus a small insurance cost.
2. Stock goes down a little: You lose small money instead of big money.
3. Stock crashes hard: You lose money on your stock position, but your put profits offset it, giving you an opportunity to buy more shares.

It’s not risk elimination. It’s intelligent risk management.

The setup is simple. For every 100 shares you own going into earnings, buy one put contract below your cost basis. Those usually cost $10 to $50 per contract.

Again, you’re not trying to eliminate losses. You’re trying to survive disasters so you can fight another day.

YOUR ACTION PLAN

The mother of all earnings trades is tonight with Nvidia. If you own this stock and are nervous… why not look to protect your position with a put against your stock?

The difference between traders who last decades and those who blow up?

The survivors never take unnecessary downside risk on binary events.