Lesson Overview

When To Exit Earnings Trades

Since we are trying to target just the IV crush that happens after earnings it’s important that you be proactive in exiting these trades quickly after the market open should the stock test one of your boundaries.

In this video we’ll walk through a live example of how exiting BBBY early after the open save us from taking a huge loss. Plus we’ll look back on another trade in CMG where we learned our lesson the hard way last year.

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  • Awesome Chris so cool to hear and THANK YOU for sharing! Congrats on the nice trade, I had a order in for CMG but just never got filled :(

    • Alvin

      I was eyeing on CMG as well, but I realized the slippage was high and the volume is way too low so I gave it a miss.. Kirk, in this case what are the other conditions that you’d highlight/recommend here to play earning trades despite not having narrow slippage and high volume?

      • If the IV is low that’s the first thing that disqualifies it for me. Otherwise if the slippage and volume are low you just have to pass.

  • When it comes to earnings trades I don’t set automatic orders because I usually just close them shortly after the market opens – for this very reason. If you did set a closing order and the market was better then YES the brokers give you the worse pricing :(

  • Yeah I say right after the open but it’s not literally that first minute. You should just watch for volume and open interest to start coming in and once it does you’ll see the prices change quickly. Sometimes it takes 3 mins sometimes 10 mins. I’ve started recording live closing earnings trades and I’ll be posting those in the next week so you can see how I go about it live on screen.

  • Yep after you get started and make a couple trades and show them you’re serious they’ll discount your rate down big time.

    • Vasilios Sahinidis

      Thanks Kirk, I appreciate you taking the time to read and answer my questions!

  • PS

    Hi Kirk, can you sell the other side and leave the other one that is profiting on strangle?

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