What Makes an Earnings Trade Worth Taking?

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When it comes to trading earnings, I don’t throw darts. I run every setup through the same filter — and nine times out of 10, most of them don’t make the cut.

One recent earnings day, I reviewed more than 20 different tickers. You know how many I actually traded? Three…

Meta (META), Microsoft (MSFT) and Robinhood (HOOD).

Everything else got tossed. Not because I didn’t like the companies — but because the numbers just didn’t justify the risk.

What Gets Cut and Why

Reddit, Eli Lilly (LLY), Roblox (RBLX), McDonald’s (MCD), Mastercard (MA), Qualcomm (QCOM), Shake Shack (SHAK) — I looked at all of them. And all of them failed my filter.

What am I looking for? I want an edge.

That starts with a fair risk-reward ratio, and ideally some positive asymmetry. If I’m risking 95 cents, I better be making $2 or $3. That’s why I passed on names like Reddit. Premium wasn’t there. Same with McDonald’s and Mastercard — low reward, high risk.

Hard pass.

Some of them had solid IV rank, sure — but the price structure didn’t work, or the expected move was too wide for the trade to make sense. I’m not here to guess direction…

I’m here to structure smart premium plays.

The Ones That Passed

Microsoft, Meta and Robinhood checked the boxes. MSFT offered a $2.50 max reward for a $1.30 debit. META gave me a cleaner setup — a 96-cent debit for a potential $2.50 return. And HOOD was basically 1-to-1 with a 51-cent cost to make 49 cents.

These aren’t lottery tickets. These are structured earnings plays with defined risk and reasonable reward. I don’t need to win them all — but if I’m consistent, the math adds up.

I’ll revisit Apple (AAPL), Amazon (AMZN) and Airbnb (ABNB) for today’s trades. But again, only if the setups are there.

I don’t force it.

In a choppy, volatile tape like this, discipline matters. A lot of traders blow themselves up chasing every earnings move. Not me. I’d rather walk away with nothing than take a flyer that doesn’t fit the plan.

That’s how you stay alive in this game.

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. 1 Daily Trade Delivered 362 winners in 2025…

JUST by aligning every single trade with the market’s expected range for the day!

And in the first 22 trades this year, this same approach has delivered 18 winners.

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We develop tools and strategies to the best of our ability, but no one can guarantee the future. There is always a risk of loss when trading. Past performance is not indicative of future results. Stated results are from live published alerts between 8/26/24 and 1/22/25. The win rate has been 89.3% on the options with an average return of 14.62% over a one-day hold time.