Earnings season is where traders either make their quarter or get chewed up and spit out. Volatility spikes, stocks make massive overnight moves, and expectations can turn on a dime. But trading earnings isn’t just about predicting a beat or a miss — it’s about understanding the expected move, managing risk and knowing when to take profits.
Too many traders get caught up in whether a company “beat” or “missed” expectations. That’s a mistake. What really matters is how the stock moves relative to what the market priced in.
Take AMD (AMD), for example.
Heading into its report last quarter, the expected move was around $12, but the stock barely moved $5 or $6. That’s a dead trade. If you’re playing volatility, you need stocks that exceed their expected move — not ones that limp along.
The same thing happened with Chipotle (CMG). It went absolutely nowhere after earnings. If you’re holding options that need a big move and the stock doesn’t give it to you, those contracts are going to decay fast.
When to Take Profits Early
Sometimes, the best earnings trade is the one you exit early. That was the case with PayPal (PYPL). It tanked after reporting weak results, and it actually dropped more than the expected move.
If I had held the full position until expiration, I could have squeezed out every last dollar of profit. But I took my gain early instead.
Why? Because I was already sitting on a 30% to 40% profit. Waiting for the last 10% to 15% wasn’t worth the risk of a reversal.
In earnings trading, taking profits early is usually the right move.
When to Let a Winner Ride
On the flip side, sometimes you have a trade that’s working exactly as planned, and you just let it run. Palantir (PLTR) was one of those.
It blew past expectations and kept running. I had a bunch of ratio spreads and leaps on it, and there was no reason to rush an exit.
When you’ve got a high-probability trade that’s printing money, patience is key.
At the end of the day, trading earnings isn’t about predicting the future. It’s about positioning for the right kinds of moves and managing risk along the way. If a stock moves less than expected, you cut your losses.
If it moves big, you take profits strategically.
Most importantly, you never let one bad trade wreck your account. Earnings season gives traders plenty of opportunities — but only if you survive long enough to take them.
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.
P.S. Wall Street Says the MAGS Are Officially Dead…
Wall Street analysts are officially declaring the Magnificent Seven, or MAGS as I like to say, dead.
They claim the tech giants are decoupling. They claim AI spending is getting out of hand…
And they believe the big tech run has finally run out of gas.
Look… they might be right about the stocks splitting up.
Or they might be dead wrong.
Either way, Q2 earnings are hitting right now… and the price action is about to get wild.
If you’re sitting at your screen trying to guess whether Nvidia, Apple or Tesla swings higher or lower on earnings day… you’re basically flipping a coin with your account.
Because this time, the market is playing by a whole new set of rules.
While everyday traders stress over picking sides, Lance, Roger, Emily and I decided to lock ourselves in a room and map out this entire earnings blitz together.
We put our best ideas into a complete Mag 7 Earnings Playbook before our upcoming July 28 roundtable event.
Inside this free guide, we rank all seven tech giants based on post-earnings profit potential… reveal which single report will trigger the next leg of the AI trade…
And highlight the No. 1 announcement that could impact the entire market.
Best of all?
We show you how to set up what I call the “two-way profit trade.”
It’s a simple setup designed to help you target profit from these massive earnings moves without ever guessing if the stock goes up or down.
As long as the stock moves, you can get paid.
No direction guessing…
Just a straightforward plan for the upcoming earnings chaos.
We’re handing over this full playbook for free to you when you reserve your spot for our Roundtable before July 28th.
Be sure to grab your free Mag 7 Playbook and lock in your Roundtable spot before Tuesday.
