Topic
Earnings
Calendars, release times, estimates and the move the options market has priced: what to know before a company reports.
An earnings report is a scheduled gap risk. The calendar tells you the date and whether it is confirmed, the release time tells you which session reacts, and the options market tells you how big a move is already priced in. Those three facts decide whether to hold through, trim or step aside.
The expected move calculator turns an implied volatility or a straddle price into a dollar range for the report.
Analysis
- Earnings Gap Trading: Let the Gap Be Tested Before You Chase It
Wait for a post-earnings gap to be tested when you need a defined stop; buy the open only with a size built to survive a full gap fill.
- Buying Options Before Earnings: The Move Is Already Priced
Buying options into earnings is a bet that the move beats the straddle's price, and the straddle already prices big moves.
- Sell Before Earnings? Stepping Aside Is a Strategy in Its Own Right
Closing a trading position ahead of the report, then choosing again once it is out, is a legitimate plan, and its costs are small against a gap.
- Estimated Earnings Dates: Treat Them as a Range Until Confirmed
Until a company confirms its report date, treat the calendar's estimate as a week-long risk window, and plan the trade around the whole week.
Explainers
Glossary
- BMO and AMC
Calendar codes for when a company releases earnings: BMO means before the regular session opens, AMC means after it closes.
- Earnings guidance
Management's own forecast of revenue, earnings per share or margins for the coming quarter or fiscal year, usually given as a range in the earnings release or on the call.
- Earnings surprise
The gap between the earnings per share a company reports and the consensus estimate for that quarter, usually shown in dollars and as a percentage of the estimate.
Calculators
- Expected Move Calculator
The move an option price implies, from implied volatility or from the straddle, before earnings or any date.