Lesson Overview

How Many Earnings Trades

If you thought that the logistics of making profitable earnings trades was different then making our regular monthly income trades you were wrong.

Making lots of earnings trades also is a requirement of your ability to trade successfully over long periods of time. This also reduces your risk that 1 company blows out earnings and gaps much higher creating a huge loss.

So this means that you need to be making more earnings trades each month with a smaller position sizes so that the probabilities have a chance to work themselves out over many different occurrences.

More Discussion

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  • Awesome great to hear Jhun!

  • Jhun

    I understand. Small but frequent. Love to do Earnings cause capital is not tied to long. My capital is not to much so been using iron condors more often in most of my trading.

  • Rich B

    Question on Earnings trades in a small account: due to the predominantly short time in most earnings trades, a smaller account would be limited in doing only a few at a time, to not invoke round trip issues right?

  • I tend to favor waiting to make a trade until earnings. If the IV is likely to stay high I don’t want the directional risk between now and then holding the position. Make sense?

    • ido9876

      Thanks Kirk…

  • Yep I would wait if you are planning to sell options. It’s not worth the risk because eventually IV will fall but likely not until the earnings event itself.

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