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I’ve been getting questions about how I approach earnings season, so I wanted to explain how I’m positioning for several major names reporting soon.
I’m using calendar spreads — a defined-risk structure designed to benefit when a stock remains near the selected strike after earnings. By selling a shorter-dated option and buying a later-dated option at the same strike, I can potentially benefit as elevated volatility comes out of the front expiration while the back option retains more time value.
The VIX recently climbed above 22 for the first time in months, making risk management especially important. Higher volatility can create richer option premiums and wider expected moves, but it also raises the chance of sharp reactions.
That favors smaller positions, defined losses and disciplined profit targets.
Building Positions on SpaceX and GE Aerospace
I started with SpaceX (SPCX), which was fast-tracked to Monday-Wednesday-Friday expirations despite being new to public markets. That signals strong demand for options on the name.
For SPCX, I sold the 150 call expiring Friday and bought the 150 call expiring the following Monday for a 25-cent debit. The broker shows an expected move of about $12, while my break-evens sit near $136 and $166.
If the stock remains within the expected move by Wednesday’s open, I’ll look to take profits. The strongest outcome would generally come from shares settling near the 150 strike. An outsized move could sink the trade, but my loss is limited to the debit paid — about $100 for my full position.
For GE Aerospace (GE), historical earnings data shows an average move of roughly 5.53%, or about 17 points at current levels. In the periods I reviewed, GE stayed within the expected move 12 times and exceeded it only four times. That history does not guarantee the next result, but it gives me an objective range for evaluating the setup.
I sold the Friday 310 call and bought the following Wednesday’s 310 call for a $1.80 debit, creating break-evens near $289 and $335. Because this trade is pricier, I’m targeting a 25% to 50% gain the next morning if GE opens within its expected range.
Adding 3M and Watching Meta, Tesla and Netflix
For 3M (MMM), the average earnings move is about 8%, or roughly $13. Most periods I reviewed did not reach that threshold during the first three to five days.
I structured the trade at the 162.50 strike for a $1.05 debit, with break-evens near $151 and $176.
I’m also watching Meta Platforms (META) and Tesla (TSLA). I will compare each stock’s expected move with its earnings history before selecting a strike rather than forcing a calendar spread where the pricing does not justify the risk.
A contained reaction could create an opportunity, while an unusually wide expected move or poor reward-to-risk profile would keep me on the sidelines.
Netflix (NFLX) is different…
If NFLX falls into the low to mid-$60s, I may prefer buying shares or selling puts at a price where I would be comfortable taking ownership. The goal is not to use one structure everywhere — it is to match each setup with the strategy offering the clearest risk and reward.
I’ll see you in the markets.
Chris Pulver
Chris Pulver Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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