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How to Take Advantage of Earnings Season Trading Opportunities

How to Take Advantage of Earnings Season Trading Opportunities

Posted On October 1, 2021 2:28 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.

[Special Offer] Learn the unique options-centric approach that led to $22,380 IN PROFITS — Claim Your FREE spot in the Earnings360 Service webinar on Oct 4th @ 1:00 pm ET / 10:00 am PT — Before It’s Too Late!  

On Monday’s call, I 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 and ensures that no single trade results in an outsized loss.  Over the past 3.5 years, Earnings360 has experienced just one losing quarter and had an average return of $1,730 per quarter for a total profit of $22,380.

equity curve

You read that right, risking just $350 per trade has raked in a $22,380 profit.

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)”. 

Now, let’s bring Post Earnings Premium Crush (also, “PEPC”), the quick-witted cousin, into our tool belt, where we rely on predicting implied volatility’s decline, or revert to the mean, once the earnings report’s released. 

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

[Limited Spots Available] Claim your FREE entry into our Live Webinar on October 4th @1:00pm ET/10:00 am PT where I’ll be discussing Earnings360’s unique, option-centric approach to trading earnings events.  

netflix stock 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 seemingly 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 getting the PEPC tailwind at our back. 

In my next article, I’ll describe the Pre-Earnings Premium or PEPE strategy. I will also be demonstrating and executing the PEPE trade live during the web presentation, Do not miss it.   

[Last Chance] Earnings360 has enjoyed 13 out of 14 winnings seasons [276 of 410 winning trades = 67% win ratio] DO NOT Miss Out… Again! Claim Your FREE spot here 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.