1. Setup Recap
Original prediction (CIEN, Dec 11 before the open): downside gap, roughly -9%, ~60% confidence, leaning “sell the news” into a rich setup. oai_citation:22‡WhisperBeat
2. Results vs Expectations
Reported results vs consensus:
- Ciena posted EPS of 0.91 vs 0.78 expected and revenue of $1.35B vs $1.29B expected (beat/beat). oai_citation:23‡Barron's
Guidance and tone:
- Management’s forward framing was read as constructive enough to support the rally (guidance/trajectory commentary came in better than feared). oai_citation:24‡Barron's
3. Price Action & Scoreboard
Before-the-open scoring window: Dec 10 close → Dec 11 open/close.
- Pre-earnings close (Dec 10): 221.85 oai_citation:25‡Investing.com
- Reaction-day open (Dec 11): 236.35 oai_citation:26‡Investing.com
- Reaction-day close (Dec 11): 242.37 oai_citation:27‡Investing.com
Computed:
- Earnings gap return: 0.065359 (up)
- Session return: 0.092495 (up)
Scoreboard:
- Gap direction vs prediction: missed (up vs predicted down).
- Session direction vs prediction: missed (up vs predicted down).
- Meaningful reversal: no (gap-and-go higher).
4. Options, Flows & Example Structures
The preview referenced an implied move around ~14%; the realized close-to-close move was ~9%, so realized volatility undershot the implied swing even though direction was the opposite of the call. oai_citation:28‡WhisperBeat
I don’t have the specific example structures from the preview text in view here, so I’m not grading particular spreads.
5. Hindsight on Reasoning & Weights
- Fundamentals mattered more than setup: the market rewarded a clean beat/beat and constructive forward posture, overpowering the “rich setup” bearish lean. oai_citation:29‡Barron's
- Weight check: the model likely overweighted valuation/positioning vs. the probability of a clean upside surprise in the print + guide.
6. Lessons & Playbook Updates
- For high-quality cyclicals with improving demand narratives, a “rich implied move” isn’t enough to lean bearish if the quarter can deliver beat/beat + upbeat forward posture — that combo can produce a clean gap-and-go.
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