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Earnings

Wednesday, October 16th 2019

Early Results from Q3 Earnings Season: Volatility Sellers Taking The First Week

The earnings season report tracks the actual move vs implied move from the straddle price.

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Summary

With only 2% of firms reported, volatility sellers are doing better than buyers for the earnings announcement trade. The return to options traders is 74% with 46% of the 13 stocks reported being profitable. The start of this earnings cycle has been slow, historically averaging 87% profitability in week #1.

With only 2% of firms we track reported, volatility sellers are doing better than buyers for the earnings announcement trade. We measure the implied earnings move from the straddle and compare it to the actual move. Currently, 13 stocks have reported of the 739 we are tracking. The return to options traders is 74% with 100% being break even. 46% of the stocks have been profitable.

The top of the table above is the current season and the bottom part is the historical average of the past 12 earnings cycles. Normally this week #1 is the least profitable week historically averaging 87%.

There is a long way to go, but the start has been slow for this earnings cycle.

 

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The opinions and ideas presented herein are for informational and educational purposes only and should not be construed to represent trading or investment advice tailored to your investment objectives. You should not rely solely on any content herein and we strongly encourage you to discuss any trades or investments with your broker or investment adviser, prior to execution. None of the information contained herein constitutes a recommendation that any particular security, portfolio, transaction, or investment strategy is suitable for any specific person. Option trading and investing involves risk and is not suitable for all investors.

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The opinions and ideas presented herein are for informational and educational purposes only and should not be construed to represent trading or investment advice tailored to your investment objectives. You should not rely solely on any content herein and we strongly encourage you to discuss any trades or investments with your broker or investment adviser, prior to execution. None of the information contained herein constitutes a recommendation that any particular security, portfolio, transaction, or investment strategy is suitable for any specific person. Option trading and investing involves risk and is not suitable for all investors. For more information please see our disclaimer.
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