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How to Profit From Earnings Season, Which Starts Next Week

How to Profit From Earnings Season, Which Starts Next Week

Posted On July 7, 2021 2:57 pm
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I’m incredibly excited for the upcoming season of my Earnings360 Service.  We’re now heading into my 15th consecutive quarter running the program. Yesterday, I hosted a webinar explaining my unique approach to trading earnings. 

Click here to access the FREE Earnings360 Replay

I do think that you’ll find that my options-centric approach brings a new level of market analysis, options expertise, and accessibility — as its generated consistent gains for over 14 quarters.  Earnings360 executes an average of 30 trades per quarter (3-4 per week) with just $350 per trade. This makes it active but also ensures that no single trade results in an outsized loss.  While we had one losing quarter of $560, Earnings360 has had an average return of $1,530 per quarter for a total profit of $21,425 over the past 14 quarters (3.5 years). 

equity curve chart

You read that right, Earnings360 members risking just $350 per trade have raked in a $21,425 profit.

Did you miss Tuesday’s Earnings360 Webinar? Watch it here for FREE! 

What this service doesn’t do is take wild shots via purchasing out-of-the-money “lottery tickets,” hoping to hit a directional home run.

The Earnings360 approach harnesses predictable changes in implied volatility that come before and after earnings reports; namely the expected decline in implied volatility that occurs after earnings report releases; something I call the “Post Earnings Premium Crush (PEPC)”. 

Why Should You Play Earnings?

Most of the time, stock prices are random walks towards parts unknown.  Sentiments, fleeting news narratives, and cursory analysis are applied to explain the various ups and downs. However, they’re mostly ascribing reasons after the fact.

However, four times a year, the truth about a company’s profitability, or lack thereof, is revealed, causing stock prices to react immediately and often dramatically. I’m talking about quarterly earnings reports, which provide an unvarnished accounting of companies’ state of business and their immediate prospects

This quarter should be particularly interesting as companies will be lapping the last year’s shutdown that began in March of 2020. I expect this to lead to very high implied volatility heading into the reports that provide pumped-up premiums for us to harness, using carefully selected strategies such as basic vertical spreads, iron condors, and double diagonals. 

However, you shouldn’t worry about being overwhelmed. Each trade recommendation is sent via text and email alerts, explaining the rationale behind employing a specific options strategy. Additionally, I provide exact step-by-step instructions on how you can place the order using defined-price limits.  Earnings360 typically sends approximately 25-30 trade recommendations over the course of the six-week program. 

This season, which will run from July 12 to August 27, should present us with a plethora of opportunities for large profits in a very short period of time!  

Click here to Watch the Earnings360 Webinar Replay for FREE

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.