2 Defined-Risk Options Strategies to Trade Quarterly Earnings Without Gambling
This article details two defined-risk options strategies – covered calls and cash-secured puts – to profit from earnings season without speculative gambling.Summary
Earnings season presents both opportunities and risks for traders due to price volatility. This article advocates for using defined-risk options strategies to navigate this period, focusing on Barchart’s tools to assess market expectations. Key metrics include 'expected move,' which predicts a probable price range based on implied volatility, and 'average earnings move,' which provides historical context. The article illustrates these concepts with Nvidia (NVDA) as an example, demonstrating how to sell covered calls to generate income on existing shares or cash-secured puts to potentially acquire shares at a lower price. These strategies are presented as a way to reduce emotional decision-making and participate in earnings season without taking on excessive directional risk. Barchart’s tools, such as its options screeners and earnings calendar, are highlighted as resources for implementing these strategies effectively.
(Source：Barchart.com)