Investors are encouraged to prepare for earnings season, which presents structured trading opportunities amid market volatility. Historically, earnings reports can lead to significant price movements, with past instances yielding returns such as 151% for SunRun within two days and 300% for Fastly over a month. This quarter, successful closed trades have achieved a 60% win rate and an average return of 85.76% over roughly 31 days.
Traders can utilize strategies like straddles and strangles to capitalize on earnings volatility without needing to predict stock direction. Instead, they focus on the magnitude of potential price movements, taking advantage of pricing discrepancies between historical post-earnings moves and current implied volatility.
As quarterly earnings are set to begin, investors are advised to identify stocks with a history of significant price shifts following earnings while considering the current market sentiment and positioning to maximize trading opportunities.
