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[Don’t Miss Out] Earnings Season Kicks Off Next Week

[Don’t Miss Out] Earnings Season Kicks Off Next Week

Posted On April 9, 2021 3:09 pm
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Earnings season is fastly approaching us and you can expect my first Earnings360 trades to be issued next week — when big banks such as JPM Morgan (JPM), Bank America (BAC), and Citigroup (C ) post their quarterly reports on Thursday.

We’ll be issuing Earnings360 trade recommendations the night before. so that you can capitalize on the unique money-making opportunities of these price catalyst moves and events

The sole focus of Earnings360’s on the price of options. Specifically, the Post Earnings Premium Crush (PEPC) that I discussed with a slew of eager listeners on today’s web call.

Instantly Access what you missed by listening to the Earnings360 Replay for FREE!

On that call, I took a deep dive into my process and approach to harnessing the power of PEPC to deliver consistent returns from earnings reports.

As discussed, even in ideal circumstances, earnings can be very tricky to trade with many moving and unknown parts involved. Three questions to ponder are: Will the company miss or beat expectations? What will be the guidance? Will traders ‘sell the news,’ or buy into the unknown, believing the recent decline has priced in a near-worst-case scenario?

However, PEPC is a reliable factor that we can predict with a high degree of confidence.

Take a look at Netflix’s (NFLX) implied volatility (gold line) vs. its realized volatility. Can you guess when the earnings reports were released?  

netflix daily volatility chart

This very simple but often-overlooked meaning of an option’s implied volatility is a powerful tool for producing consistent and predictable profits in what can otherwise seem as irrational earnings report responses. 

I can’t tell you how many times a company delivered the triple play of ‘beat on revenue, beat on EPS, and raised guidance,’ only to be smashed with a sell on-the-news response. 

While the Earnings360 option-centric approach isn’t a guarantee, it does stack the odds considerably more in our favor — by taking the guesswork out of the game. 

[Unique Trading Opportunity] Claim your FREE Earnings360 Replay Video before it’s too late!

 

About author

Steve Smith

Steve Smith have been involved in all facets of the investment industry in a variety of roles ranging from speculator, educator, manager and advisor. This has taken him from the trading floors of Chicago to hedge funds on Wall Street to the world online. From 1987 to 1996, he served as a market maker at the Chicago Board of Options Exchange (CBOE) and Chicago Board of Trade (CBOT). From 1997 to 2007, he was a Senior Columnist and Managing Editor for TheStreet.com, handling their Option Alert and Short Report newsletters. The Option Alert was awarded the MIN “best business newsletter” in 2006. From 2009 to 2013, Smith was a Senior Columnist and Managing Editor for Minyanville’s OptionSmith newsletter, as well as a Risk Manager Consultant for New Vernon Capital LLC. Smith acted as an advisor to build models and option strategies to reduce portfolio exposure and enhance returns for the four main funds. Since 2015, he has worked for Adam Mesh Trading Group. There, he has managed Options360 and Earning 360, been co-leader of Option Academy, and contributed to The Option Specialist website.