Earnings season is about to heat up, and this week is going to be a busy one.
We have 144 companies reporting earnings, and then we’re looking at over 400 next week. If there’s a time to get positioned for some big moves, it’s now because volatility is about to spike — the VIX is up over 3% today — and that means opportunity.
As traders, earnings season is like our Super Bowl.
Companies are either going to impress or disappoint, and the market will react accordingly. The key is to anticipate how these earnings will impact not just individual stocks, but also entire sectors.
A good earnings beat from a major player like Apple or Amazon can send the entire tech sector higher, while a miss from a big bank could drag the financials down with it.
So how do we prepare?
First, make sure you’re tracking the right stocks. Focus on names that have a history of big moves post-earnings — these are the stocks that can give you the most bang for your buck. Think of stocks like Netflix (NFLX), Tesla (TSLA) or Nvidia (NVDA), which have been known to swing 5% or more after reporting.
Next, use options to play the volatility.
This is where strategies like straddles or strangles come into play — you’re betting on the stock making a significant move, but you don’t have to predict which direction. With so much earnings news coming out, it’s not about picking the exact outcome, but rather profiting from the movement.
Also keep a close eye on implied volatility. It usually spikes ahead of earnings, so buying options before the report and selling after the volatility crush can be a solid strategy.
One thing to keep in mind is that it’s not just about the numbers…
Earnings reports are about guidance as much as they are about profits. If a company reports a good quarter but lowers future expectations, that stock could still get hit.
On the flip side, a company might miss on earnings but raise guidance, and the market will reward it. This is why we look at earnings as a broader picture — we’re not just trading numbers, we’re trading sentiment.
Looking at the macro level, this earnings season is especially interesting. We’ve got the Fed likely cutting rates again in November, so there’s a lot of optimism baked into the market right now.
But if earnings disappoint across the board, that optimism could fade fast. Keep your eyes on the overall trend — a few bad reports might not tank the market, but a broader pattern of weaker earnings could signal trouble ahead.
So buckle up, because the next two weeks are going to be packed with opportunities. If you’re prepared, this could be one of the most profitable stretches of the year. Just remember…
Volatility is your friend, and earnings season is when you make the big plays.
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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