Earnings & Options | Learn How To Trade Earnings

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With the market's direction becoming tenuous, especially in mega tech and especially yet further in semi-conductorswe can explore option trading opportunities in Micron Technology, Inc NASDAQ: MU that do not rely on stock direction.

It turns out, over the long-run, for stocks with certain tendencies like Micron Technology, Inc, there is a clever way to trade market anxiety or market optimism before earnings announcements with options. The goal is to benefit from a unique and very short time frame when the stock might move 'a lot', either due to earnings anxiety stock drops before earnings or earnings optimism stock rises before earningsbut taking no actual earnings risk. This trade is not a panacea, which is to say, we trading options earnings announcements calendar to test it, stock by stock, to see when and why it worked.

We start with Micron Technology, Inc. We are testing opening the position 3 trading days before earnings and then closing the position on the day trading options earnings announcements calendar earnings. Since MU reports after the market closes, this back-test does not making any earnings bet. This is not making any stock direction bet.

Here is that setting:. If it was, the trade was closed. MU over the years but only held it before earnings we get these results:. We see a That's a total trading options earnings announcements calendar just 16 days 4 days for each earnings date, over 4 earnings dates.

While this at-the-money pre-earnings straddle strategy has an overall return of This is it -- this is how people profit from the option market -- finding trading opportunities that avoid earnings risk and work equally well during a bull or bear market.

Tap Here to See the Tools at Work. You should read the Characteristics and Risks of Standardized Options. Trading futures and options involves the risk of loss. Please consider carefully whether futures or options are appropriate to your financial situation. Only risk capital should be used when trading futures or options. Investors could lose more than their initial investment. Past results are not necessarily indicative of future results. The risk of loss in trading trading options earnings announcements calendar be substantial, carefully consider the inherent risks of such an investment in light of your financial condition.

Please note that the executions and other statistics in this article are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity and slippage. Preface With the market's direction becoming tenuous, especially in mega tech and especially yet further in semi-conductorswe trading options earnings announcements calendar explore option trading opportunities in Micron Technology, Inc NASDAQ: For context, here is a trading options earnings announcements calendar stock chart of MU, and we have noted the recent volatility.

The Trade Before Earnings The goal is to benefit from a unique and very short time frame when the stock might move 'a lot', either due to earnings anxiety stock drops before earnings or earnings optimism stock rises before earningsbut taking no actual earnings risk.

Here is the setup: Once we apply that simple rule to our back-test, we run it on an at-the-money straddle: Here is that setting: MU over the years but only held it before earnings we get these results: Setting Expectations While this at-the-money pre-earnings straddle strategy has an overall return of We note the rather risk controlled nature of this setup over the last year.

To see how to do this for any stock we welcome you to watch this quick demonstration video: Past performance is not an indication of future results. Buries Short-Sellers, For Now. Greenbrier Gains on Q2 Earnings.

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