Exiting Earnings!

When Should You Exit an Options Trade, Before or After the Report?

by Ian Harvey
August 25, 2019

Share

Exiting earnings before or after the report has been presented has always been a contentious issue amongst traders. If you exit a trade before the report, obviously at a profit, then psychological thinking takes over – “should I have kept the trade until after the report as it may have been extraordinarily in my favor, and have I missed a much larger profit?”

But “a bird-in-the-hand” is better than “two-in-the-bush.” This also allows for a more peaceful trading setting!

I brought this scenario to light on June 10, last year in an article “Exiting Options Trades BEFORE or AFTER Earnings Reports Comparison! When Is The Best Time?”

To help give more insight into this topic, I have put together quite a lot of actual results to help the investor/ trader get a much clearer picture in regard to deciding when to exit earnings, which could help implement the best strategies going forward.

Each week “Earnings Predictions” Members are presented with 5 or more trades based on earnings and some recent results are listed below…..

These figures are based on the assumption that all trades are equal. Trading capital management is a key component of your trading strategy. The strategy, on which we base our trades to achieve maximum profit, and to minimize loss, is contingent on using an equal amount of money for each trade. Read more in the article “Trading Capital Management.”

Let’s look more closely at two situations….

The first instance is where holding the trade until after earnings outpaces exiting earnings before the report. Note that P.P. refers to Potential Profit.

In this case exiting earnings after the report is presented is much more profitable – 3,037.5% P.P. compared to exiting before, which only returns 961%.

EARNINGS PREDICTIONS RESULTS FOR LAST WEEK

DATE TRADE GAIN/LOSS
July 23, 2019 SNAP AUG 16 2019 15.000 CALL 371% P.P.
July 24, 2019 BA AUG 16 2019 360.000 PUT 512% P.P.
July 24, 2019 TSLA AUG 16 2019 250.000 PUT 197% P.P.
July 25, 2019 TEAM AUG 16 2019 140.000 CALL 138% P.P.
July 26, 2019 TWTR AUG 16 2019 38.000 CALL 176% P.P.

EARNINGS PREDICTIONS RESULTS FOR LAST WEEK BEFORE EARNINGS

DATE TRADE GAIN/LOSS
July 23, 2019 SNAP AUG 16 2019 15.000 CALL 22% P.P.
July 24, 2019 BA AUG 16 2019 360.000 PUT 70% P.P.
July 24, 2019 TSLA AUG 16 2019 250.000 PUT 24% P.P.
July 25, 2019 TEAM AUG 16 2019 140.000 CALL 25% P.P.
July 26, 2019 TWTR AUG 16 2019 38.000 CALL 27% P.P.

The second instance is different compared to the first scenario, where exiting earnings before the report is a bit better than holding onto the trade.

Exiting earnings before the report brings in 597% against holding for the report, which gives 564%.

EARNINGS PREDICTIONS RESULTS FOR LAST WEEK

DATE TRADE GAIN/LOSS
August 19, 2019 IQ SEP 20 2019 17.500 CALL 42.5% P.P.
August 20, 2019 KSS SEP 20 2019 45.000 PUT 41% P.P.
August 21, 2019 SPLK SEP 20 2019 130.000 CALL -65%
August 22, 2019 CRM SEP 20 2019 145.000 CALL 191% P.P.
August 23, 2019 FL SEP 20 2019 37.500 PUT 111% P.P.

EARNINGS PREDICTIONS RESULTS FOR LAST WEEK BEFORE EARNINGS

DATE TRADE GAIN/LOSS
August 19, 2019 IQ SEP 20 2019 17.500 CALL N/A
August 20, 2019 KSS SEP 20 2019 45.000 PUT N/A
August 21, 2019 SPLK SEP 20 2019 130.000 CALL 32% P.P.
August 22, 2019 CRM SEP 20 2019 145.000 CALL 56% P.P.
August 23, 2019 FL SEP 20 2019 37.500 PUT 13% P.P.


Here is a view of the results for the past 5 weeks…..

EARNINGS PREDICTIONS RESULTS FOR THE LAST FIVE WEEKS

DATE - WEEK BEGINNING EXITING BEFORE EARNINGS EXITING AFTER REPORT
July 22, 2019 168% P.P. 1394% P.P.
July 29, 2019 228% P.P. 246% P.P.
August 05, 2019 597% P.P. 565% P.P.
August 12, 2019 -133% 513% P.P.
August 19, 2019 101% P.P. 320.5% P.P.

Final Word…..

Psychologically, and for the “peace-of-mind,” it may be best to opt out of the options trade before the earnings report.

GETTING OUT WHILST THE GOING IS GOOD!

GREED CAN BE THE UNDOING OF A GOOD PROFIT!

Or, taking the risk that the earnings report will be in your favor and hoping to gain more profits by not exiting earnings before the report.

DECISION TIME!

AS ALWAYS THE DECISION IS YOURS!

If you are not a member and are interested in being part of this profitable action just CLICK HERE.


An Important Note: That any suggestions for options trade considerations require investors/traders to use their own discretion as to when to enter or exit! As well, it is advisable to do further research and due diligence before executing your trade.

It is sometimes best to exit a trade, if there is already sufficient profit accrued, before an earnings report is presented. GREED can be the undoing of a nice profit!


Best of Trading,
Ian Harvey
Director of Stock Options Made Easy


Share



”Success is simple. Do what's right, the right way, at the right time.”


Option Tip for your Success!
Options traders are not successful because they win.
Options traders win because they are successful.



Back to Stock Options Made Easy Home Page from Exiting Earnings! When Should You Exit an Options Trade, Before or After the Report?