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By Ainvest in options-flow —

AXON: $2.85M Put Protection (Nov 4)

Someone just dropped $2. Unusual $2.85M positioning on AXON. Stock up 18.4% this year. Activity 2.8x above normal.

🔫 AXON $2.8M Put Buying After 20% Post-Earnings Crash - Smart Money Hedging or More Pain Ahead?

📅 November 4, 2025 | 🔥 Unusual Activity Detected

🎯 The Quick Take

Someone just dropped $2.8 MILLION on protective AXON puts at 10:54:42 AM today - just hours after the stock crashed 20% overnight following Q3 earnings! This isn't random panic selling - this is sophisticated protection being layered in at $640-$700 strikes expiring November 21st, totaling 460 contracts per strike. With AXON still trading at $711.41 (down from $880 pre-earnings), smart money is betting this isn't the bottom. Translation: The institutions are bracing for more downside!

📊 Company Overview

Axon Enterprise, Inc. (AXON) is the dominant provider of public safety technology solutions, serving law enforcement agencies worldwide:
- Market Cap: $56.85 Billion
- Industry: Ordnance & Accessories (Public Safety Tech)
- Current Price: $711.41 (down 18.6% from pre-earnings)
- Primary Business: TASER energy weapons, body cameras, cloud-based digital evidence management, AI-powered law enforcement software
- Market Share: 68.3% in integrated law enforcement technology
- Employees: 4,970
- Customer Base: Approximately 17,500 law enforcement agencies

💰 The Option Flow Breakdown

The Tape (November 4, 2025 @ 10:54:42):

Time Symbol Buy/Sell Call/Put Expiration Premium Strike Volume OI Size Spot Price Option Price
10:54:42 AXON BUY PUT 2025-11-21 $2,000,000 $700 1,100 206 460 $711.41 $42.40
10:54:42 AXON BUY PUT 2025-11-21 $846,000 $640 1,100 135 460 $711.41 $18.40

🤓 What This Actually Means

This is a dual-strike put protection strategy executed in the aftermath of a brutal earnings selloff:

  • 💸 Total capital deployed: $2.8M ($2M + $846K)
  • 🎯 Two-tiered protection: $700 strike (near-the-money) + $640 strike (10% OTM)
  • ⏰ 17 days to expiration: November 21st monthly OPEX
  • 📊 460 contracts per strike: Represents 92,000 shares or ~$65M of stock exposure
  • 🏦 Post-earnings positioning: Trade executed AFTER the 20% overnight crash
  • 📈 Premium paid: $42.40 for $700 puts (6% of stock price), $18.40 for $640 puts (2.6% of stock price)

What's really happening here:

Someone who either holds significant AXON shares or expects further downside is paying up for downside protection at two different strikes. The $700 put costs $42.40 with the stock at $711 - meaning just $11 of intrinsic value and $31 of time premium. That's expensive insurance, suggesting urgency. The $640 put at $18.40 is pure time value, acting as a cheaper lottery ticket for a continued crash.

Key observation: Buying puts AFTER a 20% drop (not before) suggests either:
1. Protection for existing long positions that they won't/can't sell
2. Anticipation that the Q3 earnings miss and tariff pressures will cause sustained selling pressure
3. Positioning ahead of potential analyst downgrades following the earnings disappointment

Unusual Score: 🔥 HIGHLY UNUSUAL (3.4x average size for $700 strike, fresh positioning on $640 strike) - This is a notable institutional-sized hedge executed at a critical technical juncture.

📈 Technical Setup / Chart Check-Up

YTD Performance Chart

AXON YTD Performance Chart

Axon is still up +18.4% YTD despite today's brutal selloff, with current price of $706.13. However, the chart reveals a concerning new dynamic - the stock just suffered its steepest decline of the year.

Key observations:
- 📉 Massive single-day drop: 20% overnight decline from $880 to $706 - largest move in 2025
- 🎢 High volatility environment: 54.7% annualized volatility signals extreme uncertainty
- 📊 Previous drawdown: Already experienced a -30% max drawdown earlier this year
- 💔 Broken uptrend: Violently broke below recent consolidation range around $780-$800
- 🔍 Volume spike: Massive selling volume on the earnings gap down suggests institutional distribution
- ⚠️ Technical damage: Death cross forming, key moving averages violated, momentum broken

Gamma-Based Support & Resistance Analysis

AXON Gamma Support/Resistance Levels

Current Price: $706.13

The gamma exposure map reveals critical support levels that could determine whether this selloff stabilizes or accelerates:

🔵 Support Levels (Put Gamma Below Price):
- $570 - Strongest nearby support with 0.04B total gamma exposure (19.2% downside from current)
- $560 - Major floor with 0.21B gamma (20.6% downside) - dealers will buy aggressive dips here
- $550 - Secondary support at 0.05B gamma (22.1% downside)
- $540 - Deep support with 0.06B gamma (23.5% downside)
- $520 - Very deep support at 0.04B gamma (26.3% downside)
- $500 - Major psychological and gamma support with 0.06B gamma (29.3% downside)

🟠 Resistance Levels (Call Gamma Above Price):
- $590 - Immediate resistance with 0.05B gamma (16.5% below pre-earnings levels)
- $600 - Major ceiling with 0.35B gamma (strongest level on entire chain!) - this is THE key resistance
- $660 - Extended resistance zone at 0.03B gamma

What this means for traders:

The gamma structure is heavily bearish with net GEX bias showing 1.45B put gamma vs 1.02B call gamma. The current price at $706 sits in no-man's land with minimal gamma support until $600 and below. The absence of strong gamma walls near current levels means price can move quickly in either direction without friction.

Most concerning: The strongest gamma concentration is at $600 (0.35B total gamma), suggesting that level acts as a magnet. Market makers holding these positions will hedge by buying/selling stock dynamically, but the heavy put positioning means they're likely net long gamma, which means they'll sell into rallies and buy dips - creating choppy, range-bound action.

Notice anything? The $640 put strike purchased today sits just above the $600 gamma fortress. This trader is positioning for a drop to that major support cluster, expecting $600 to act as a floor but protecting against a breach to $640.

Net GEX Bias: Bearish (1.45B put gamma vs 1.02B call gamma) - Overall positioning leans protective/bearish, consistent with the put buying we're seeing today.

Implied Move Analysis

AXON Implied Move Analysis

Options market pricing for upcoming expirations:

  • 📅 Monthly OPEX (Nov 21 - 17 days): ±$84.11 (±11.71%) → Range: $646.62 - $827.45
  • 📅 Quarterly Triple Witch (Dec 19 - 45 days): ±$99.53 (±13.86%) → Range: $630.52 - $852.07
  • 📅 Yearly LEAPS (Dec 18, 2026 - 409 days): ±$246.24 (±34.29%) → Range: $457.38 - $978.84

Translation for regular folks:

Options traders are pricing in a 12% move ($84) by November 21st - that's HUGE volatility even after today's 20% gap down! This elevated implied move suggests the market expects continued wild swings. The November 21st expiration (when these puts expire) has a lower range of $646.62 - meaning the market thinks there's a realistic chance AXON tests the low $600s within the next 17 days.

The December quarterly expiration shows similar volatility expectations with a downside range to $630. What's interesting is that even the LEAPS (1+ year out) are pricing in massive 34% moves, suggesting long-term uncertainty about valuation post-earnings miss.

Critical observation: The $700 and $640 put strikes that were purchased today sit right at the edge and below the implied move range for November expiration. The buyer is positioning for the lower end of expected outcomes.

🎪 Catalysts

🔥 Recent Events (Already Happened)

Q3 2025 Earnings Miss - November 4, 2025 (TODAY!) 📊

Axon reported Q3 2025 results before market open today, triggering a brutal 20% overnight decline. Despite revenue beat, the earnings miss was severe:

Segment Performance:
- 💻 Connected Devices (56% of revenue): $405M, up 24% YoY - includes TASER weapons, body cameras, drones
- 📱 Software & Services (44% of revenue): $305M, up 41% YoY - higher-margin cloud and AI products

Key takeaway: Revenue growth remains strong at 31%, but margin compression from tariffs caught investors off guard. The 24% EPS miss is severe enough to trigger algorithmic selling and force funds to reassess price targets.

Valuation Reset: At 174x P/E ratio pre-earnings, AXON was priced for perfection. The margin pressure narrative has shattered that assumption, forcing a brutal valuation reset. Even after today's 20% drop, valuation remains elevated.

🚀 Near-Term Catalysts (Next 90 Days)

Carbyne Acquisition Integration - Expected Q1 2026 📱

Axon announced a definitive agreement to acquire Carbyne for $625M, creating Axon 911 - a transformative move into emergency communications:

Strategic significance: This positions Axon at the critical entry point of every emergency response, where vital information is currently lost between the 911 call and field response.

Prepared Acquisition Completion - October 2025 (JUST CLOSED!) 🚨

Axon completed its $640M acquisition of Prepared, an AI-powered emergency communications company. Together with Carbyne, these acquisitions position Axon to transform the 240 million annual 911 calls made in the U.S. by providing dispatchers and responders with AI-enhanced context and real-time coordination.

What to watch: Integration execution and whether these acquisitions can offset margin pressures from tariffs. Combined $1.27B in acquisitions (Prepared $640M + Carbyne $625M) represents significant capital deployment that needs to generate returns.

TASER 10 Adoption Acceleration 🔫

The TASER 10 is the fastest-adopted TASER product in company history, with adoption rates 2x faster than TASER 7:

Analyst Reactions and Downgrades - Next 1-2 Weeks 📉

Following today's earnings miss and margin guidance concerns, expect potential analyst downgrades:

🌍 Medium-Term Catalysts (Q1-Q2 2026)

International Market Expansion 🌏

International expansion represents a major growth vector, with international bookings growing nearly 50% sequentially in Q4 2024 implying triple-digit year-over-year growth:

Axon Body Workforce Mini Enterprise Rollout 👔

Launched September 2025, this compact AI-enabled body camera targets retail, healthcare, and frontline workers - a massive market expansion beyond law enforcement:

AI-Powered Draft One Expansion 🤖

Draft One remains the fastest-adopted software product in Axon history with nearly 30,000 active users:

🎯 Long-Term Catalysts (2026+)

Annual Recurring Revenue (ARR) Growth Trajectory 💰

Axon's subscription-based business model is driving exceptional recurring revenue growth:

Total Addressable Market (TAM) Expansion to $129B 🌐

Axon's TAM has grown to $129 billion with less than 2% penetration - meaning 98% of the market remains uncaptured:

Competitive Moat and Market Position 🏰

Axon maintains 68.3% market share in integrated law enforcement technology with powerful structural advantages:

⚠️ Risk Catalysts (Negative)

Tariff Margin Compression (ONGOING!) 💰

Acquisition Integration Execution Risk 🎲

  • 💵 $1.27B deployed: Carbyne ($625M) + Prepared ($640M) in past 60 days
  • 🎯 Must successfully integrate while maintaining organic growth
  • 📊 Dilution concerns from significant capital deployment
  • ⏰ Integration timelines must be met to realize synergies

Government Budget Constraints 💵

  • 🏛️ State and local government funding constraints could slow growth
  • 🗳️ Political cycles and budget priorities can shift
  • 📊 ~70% of revenue from U.S. state/local law enforcement
  • ⚠️ Economic recession would pressure government IT spending

Valuation Remains Elevated Despite Selloff 📊

  • 📈 174x P/E ratio pre-earnings, still elevated post-crash
  • 💰 At $706, forward P/E likely still above 100x
  • 🎯 Growth expectations must remain intact to justify multiples
  • ⚠️ Any further disappointments could trigger additional multiple compression

🎲 Price Targets & Probabilities

Using gamma levels, implied move data, earnings catalyst, and current momentum, here are the scenarios through November 21st expiration:

📉 Bear Case (45% probability)

Target: $600-$640

How we get there:
- 📊 Analyst downgrades cascade over next 1-2 weeks following 24% EPS miss
- 💔 Margin guidance concerns worsen as tariff situation clarifies
- 📉 Technical breakdown: Stock fails to hold $700 level, triggering algorithmic selling
- 🎯 Gamma support cluster at $600 (0.35B gamma) acts as magnet - strongest level on chain
- 🔍 Further deterioration in technical indicators drives momentum sellers
- 💰 Profit-taking from longs who held through earnings accelerates
- 🌊 Broader market weakness compounds single-stock weakness
- 📈 Implied move lower bound: $646.62 by November 21st

Key support levels: Strong gamma at $600 (0.35B) should provide a floor. Below that, $560 (0.21B gamma) is next major support.

Why this is most likely: The severity of the EPS miss (24%) and margin pressure narrative typically takes weeks (not days) for the market to fully digest. Initial algorithmic selling often continues as stop losses cascade. The $2.8M put buying we're seeing today suggests sophisticated players expect this scenario.

Put P&L in Bear Case:
- Stock at $640 on Nov 21: $700 puts worth $60, profit = $17.60/share × 460 = $810K gain (41% ROI)
- Stock at $640 on Nov 21: $640 puts worth $0 (at-the-money), loss = -$18.40/share × 460 = -$846K (100% loss)
- Stock at $600 on Nov 21: $700 puts worth $100, profit = $57.60/share × 460 = $2.65M gain (133% ROI!)
- Stock at $600 on Nov 21: $640 puts worth $40, profit = $21.60/share × 460 = $994K gain (117% ROI!)

🎯 Base Case (35% probability)

Target: $680-$740 range

Most likely scenario:
- 📊 Stock stabilizes around $700 level after initial panic selling exhausts
- ✅ Analysts acknowledge EPS miss but maintain long-term bullish thesis on TAM expansion
- 💰 Strong balance sheet ($2.4B cash) and revenue growth (31%) prevents further meltdown
- 🔄 Trading range-bound between $680-$740 into November OPEX
- 📈 Gamma structure shows minimal support/resistance in current zone - allows choppy trading
- 🌐 International growth story and $129B TAM expansion keeps long-term bulls engaged
- 📅 Market waits for Q4 results and Carbyne integration progress

This is the "digestion" scenario: Stock remains volatile but doesn't collapse further. The $2.8M put position bought today provides downside protection in this range, suggesting the buyer expects choppiness but not necessarily a crash continuation.

📈 Bull Case (20% probability)

Target: $760-$820

What needs to happen:
- 🚀 Analysts defend the stock, focusing on 31% revenue growth and $1.3B ARR trajectory
- 💪 Management team provides additional color/confidence on earnings call follow-ups
- 🔄 Short squeeze develops as heavily shorted stock bounces from oversold levels
- 🎯 Bargain hunters step in, viewing 20% drop as overreaction to margin guidance
- 🌍 Major international contract announcement (Canada/EMEA) shifts sentiment
- 📊 Q4 year-end budget flush spending from law enforcement agencies confirmed
- 🤖 AI product traction (Draft One, Axon 911) gains positive media attention

Key resistance: Gamma resistance at $600 above and minimal call gamma in the $700s means bulls need sustained buying to push higher. Implied move upper range of $827 by Nov 21st seems unlikely given current sentiment.

Why this is least likely: Markets rarely forgive 24% EPS misses this quickly, especially for high-multiple growth stocks. The put buying activity suggests even bulls are hedging, not doubling down aggressively.

💡 Trading Ideas

🛡️ Conservative: Cash Gang - Wait for Stability

Play: Stay on sidelines for at least 1-2 weeks until dust settles

Why this works:
- ⏰ 24% EPS miss with margin pressure concerns needs time to be fully priced in
- 📉 Post-earnings volatility typically takes 5-10 trading days to normalize
- 💸 Implied volatility elevated (54.7%) makes options expensive for buyers
- 📊 Technical damage severe - broken support levels, downtrend established
- 🎯 Better entry points likely after analyst downgrades flush out weak hands
- 📈 Historical pattern: High-growth stocks often find lower lows post-earnings disappointments

Action plan:
- 👀 Watch for analyst reports over next 48-72 hours
- 🎯 Monitor $600 level - if broken, wait for $560; if holds, consider entry
- ✅ Look for signs of stabilization: declining volatility, reducing volume, positive divergences
- 📊 Review Q4 guidance and management commentary for margin improvement timeline
- 💰 Consider entering if stock holds $680-$700 for 5+ consecutive days

Risk level: Minimal (cash position) | Skill level: Beginner-friendly

Expected outcome: Avoid potential further 15-20% drawdown if selloff continues. Get better entry if stock consolidates. Maintain optionality.

⚖️ Balanced: Defined-Risk Put Spread

Play: Sell bearish put spread December 19th expiration after stability emerges

Structure: Buy $640 puts, Sell $600 puts (Dec 19 quarterly expiration)

Why this works:
- 🎯 Defined risk structure ($40 wide = $4,000 max risk per spread)
- 📊 Targets gamma support cluster where put gamma is strongest at $600 (0.35B)
- ⏰ 45 days to expiration gives time for downward drift to exhaust
- 📉 Bearish directional bias aligns with put buying flow and technical breakdown
- 🌊 Captures downside momentum if Bear Case ($600-$640 target) materializes
- 💰 Lower capital requirement than outright puts, defined risk unlike short stock

Estimated P&L (current IV environment):
- 💰 Net debit: $20-25 per spread ($2,000-2,500 per full spread)
- 📈 Max profit: $1,500-2,000 if AXON at/below $600 at December expiration
- 📉 Max loss: $2,000-2,500 if AXON above $640 (defined and limited)
- 🎯 Breakeven: ~$620-625

Entry timing: Wait for a dead-cat bounce to $720-740 over next few days to enter with better risk/reward, OR enter now if conviction is strong that $600 will be tested.

Position sizing: Risk only 2-5% of portfolio (this is directional speculation, not core holding)

Risk level: Moderate (defined risk, bearish directional) | Skill level: Intermediate

🚀 Aggressive: Short Stock + Long Calls (Synthetic Put with Upside Protection)

Play: Short stock at $710, Buy $780 calls December expiration as disaster hedge

Why this could work:
- 📉 Bearish bias supported by put flow, earnings miss, margin pressures, technical breakdown
- 💰 Profit from continued downside while capping risk with long calls
- 🚀 If miracle recovery occurs, long calls limit losses (synthetic risk reversal)
- 🎯 Targets Bear Case scenario ($600-$640) for maximum profit
- ⚡ Allows aggressive directional bet without unlimited risk of naked short
- 📊 Implied move and gamma structure support further downside

Structure:
- 📉 Short 100 shares at $710 = $71,000 credit
- 📈 Buy 1x $780 Dec calls for ~$15-20 premium = $1,500-2,000 debit
- 🎯 Net position: Short stock with upside capped at $780

Why this could blow up (SERIOUS RISKS):
- 💥 Borrow costs and margin requirements: Stock may be hard-to-borrow with high fees, requires margin account
- 😱 Short squeeze risk if major positive catalyst emerges (large contract win, analyst upgrade defense)
- 🚀 If stock rips back to $800+ on institutional buying, losses mount quickly past $780
- ⚠️ Dividend/corporate action risk: Short sellers responsible for any dividends (unlikely but possible)
- 📉 Options decay: Long calls lose time value daily even if stock doesn't move
- 💰 Margin calls: Broker may require significant capital to maintain short position

Estimated P&L:
- 💰 Max profit: $69,000-69,500 if AXON goes to zero (unrealistic, but defines max gain)
- 📈 Realistic profit at $600: $11,000 profit on short stock - $1,500-2,000 call premium = ~$9,500 net gain
- 📉 Max loss: Capped at stock reaching $780 = $7,000 loss on short + $1,500-2,000 call premium = ~$8,500-9,000 max loss
- ⚠️ Loss accelerates if stock gaps above $800: Every $10 above $780 = additional $1,000 loss until calls provide hedge

Risk level: HIGH (requires margin, borrow costs, unlimited loss potential above call strike) | Skill level: Advanced only

⚠️ WARNING: DO NOT attempt this trade unless you:
- Have experience with short selling and understand borrow costs/margin
- Can handle overnight gap risk (earnings was today, but other catalysts possible)
- Have sufficient capital to meet margin requirements (~$30,000+ typically)
- Understand options Greeks and how long calls hedge short stock exposure
- Can actively monitor and manage if position moves against you
- Recognize this is a directional bet that tariff/margin pressures worsen

⚠️ Risk Factors

Don't get caught by these potential landmines:

  • 💔 Severe earnings miss just happened: 24% EPS miss ($1.17 vs $1.52 estimate) is not a small disappointment - it's a major shortfall that forces portfolio managers to reassess positions. Algorithmic selling and stop-loss cascades often continue for days/weeks after such misses.

  • 🌍 Tariff margin compression is structural: This isn't a one-quarter issue. Global tariffs on Connected Devices segment represent ongoing cost pressure that won't disappear quickly. Management's Q4 guidance suggests it continues. Political/trade dynamics remain unpredictable.

  • 💰 Valuation still elevated after 20% drop: At 174x P/E pre-earnings, even a 20% haircut leaves AXON trading at premium multiples. Forward P/E likely still above 100x. High-growth stocks can fall 30-50% when earnings disappoint - this may not be done.

  • 📊 Analyst downgrades coming: Current consensus price targets ($704-$887, high of $1,000) were set before today's earnings disaster. Expect cascading target cuts over next 48-72 hours as analysts publish notes, which could trigger additional selling pressure.

  • 🎲 $1.27B acquisition integration risk: Carbyne ($625M) + Prepared ($640M) represent massive M&A activity. Any integration hiccups, customer churn, or slower-than-expected synergies will disappoint already-rattled investors.

  • 🏛️ Government budget dependency (70% revenue from state/local): Economic weakness or political shifts could pressure public safety IT budgets. State/local governments often cut technology spending first during budget crises. Current macro uncertainty elevated.

  • 📉 Technical damage severe - death cross forming: Stock broke decisively below key moving averages, support levels obliterated, downtrend established. Chartists and momentum traders will sell on any bounces until technical picture repairs (takes weeks/months).

  • 🎯 Put buyers suggesting more pain: The $2.8M put purchase we're analyzing was executed AFTER the 20% drop, not before. Sophisticated players who accurately read the market are positioning for further downside. That's a negative signal.

  • 🌊 Lack of gamma support in current range: Gamma exposure map shows minimal support between $700 and $600. Stock could "air pocket" down quickly without friction until hitting the $600 wall (0.35B gamma). That's a 15% drop from current levels.

  • ⚡ IV crush won't help new option buyers: Implied volatility spiked on the earnings gap down. While this hurts existing option holders, new buyers face expensive premiums. Both puts and calls are pricey, making directional bets expensive with less potential return.

  • 🎢 Dead-cat bounces will trap bulls: After severe selloffs, stocks often bounce 5-10% on short covering and dip buying, only to roll over and make new lows. Don't mistake relief rallies for recovery. Wait for genuine stabilization signals.

🎯 The Bottom Line

Real talk: Someone just spent $2.8M on AXON put protection AFTER a 20% overnight earnings crash, not before. That's the exact opposite of what you'd expect if smart money thought the selloff was overdone. They're not buying the dip - they're hedging for more pain or protecting existing positions they can't (or won't) sell. That's a massive red flag.

What this trade tells us:
- 🎯 Sophisticated player expects AXON to test $640-$700 range over next 17 days
- 💔 The 24% EPS miss and tariff margin pressure story has legs - not a one-day overreaction
- ⚖️ Either hedging long stock position or making directional bearish bet
- 📊 Buying protection AFTER (not before) 20% drop suggests more downside expected

If you own AXON:
- 😰 Consider lightening exposure significantly - this is not a "buy the dip" setup yet
- 📊 Gamma support at $600 (0.35B) provides potential floor, but that's 15% lower
- ⏰ Wait for analyst commentary over next 48-72 hours before making decisions
- 🎯 If holding long-term, consider buying protective puts at $640-$660 strikes (December expiration)
- 🛡️ Set hard stop at $680 if you're not willing to ride it to $600

If you're watching from sidelines:
- ⏰ DO NOT rush to buy this dip - post-earnings selloffs take time to stabilize
- 🎯 Wait for genuine stabilization signals: holding $700 for 5+ days, declining volume, positive divergences
- 📈 Better entries likely around $640-$660 if Bear Case materializes, or $680-$700 if Base Case holds
- 🚀 Long-term bull thesis intact (31% revenue growth, $1.3B ARR, $129B TAM), but timing is crucial
- ⚠️ Current risk/reward favors patience over aggression

If you're bearish:
- 🎯 Put spreads ($640/$600 December) offer defined-risk way to play continued downside
- 📊 First major support not until $600 - room to fall
- ⚠️ Don't overstay - gamma support at $600 and $560 should eventually halt decline
- ⏰ Analyst downgrade cycle likely 48-72 hours out - could provide additional selling pressure
- 📉 Wait for any dead-cat bounce to $720-$740 for better entry on bearish positions

Mark your calendar - Key dates:
- 📅 November 4-6 (This Week) - Analyst reaction notes publish following earnings miss
- 📅 November 21 - Monthly OPEX, expiration of the $2.8M put position we analyzed
- 📅 December 19 - Quarterly triple witch, significant options expiration
- 📅 Q1 2026 (Jan-Mar) - Carbyne acquisition expected to close
- 📅 February 2026 - Q4 2025 earnings report (critical to see if margins improve)

Final verdict: This is a classic "catch a falling knife" scenario. The long-term story (dominant market position, 68.3% share, $129B TAM, international expansion) remains compelling, but the short-term picture is ugly. When sophisticated players spend $2.8M on downside protection after a 20% crash, they're seeing something others don't. Patience will be rewarded - rushing in won't. Let the dust settle, watch analyst reactions, and wait for technical stabilization before deploying capital.

The margin pressure from tariffs is real and structural. Until management provides a credible path to recovering margins, this stock will trade heavy. Better entries are coming - don't feel pressured to "buy the dip" immediately. The 31% revenue growth and $1.3B ARR aren't going anywhere, but valuation needed to reset. Let it happen.

Disclaimer: Options trading involves substantial risk of loss and is not suitable for all investors. This analysis is for educational purposes only and not financial advice. Past performance doesn't guarantee future results. The unusual options activity reflects specific trades from sophisticated players - it does not guarantee profitability or that you should follow it. Post-earnings volatility creates significant risks with potential for large moves in either direction. The 3.4x unusual score reflects this trade's size relative to recent open interest - not a prediction of success. Always do your own research and consider consulting a licensed financial advisor before trading. Catching falling knives can result in severe losses if timing is wrong.

About Axon Enterprise, Inc.: Axon develops an integrated public safety platform combining hardware and cloud software, including TASER energy devices, body cameras, cloud-hosted digital evidence management, and AI-powered solutions. With a $56.85 billion market cap, Axon serves approximately 17,500 law enforcement agencies worldwide in the Ordnance & Accessories industry.

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