Breakdown: My Earnings Trading Strategy

Dear Profit Takeover reader,

Earnings season starts next week…

And I am hoping to take advantage of these opportunities to play volatility into earnings.

You know my earnings catchphrase:

Trade to it, not through it.

But it’s important for traders to understand why – so they can use this trick themselves.

This morning on the Profit Takeover show, I wanted to show you an example of what happens to volatility before and after earnings.

So, I pulled up F – Ford Motor Company (NYSE:F) on our wallstreet.io software…

I zoomed in on the last time that F posted earnings – on February 3rd 2022.

This red line at the bottom is the implied volatility indicator…

Around earnings, I want to buy options when vol is low, not high.

As you can see in the chart, volatility ramped up heading into earnings, spiked, and then dropped after earnings results were posted.

I can trade ahead of the volatility pop during pre earnings –

And post earnings, I can trade the volatility crush.

The traders in the Profit Revolution are able to follow along with me using the wallstreet.io app as part of their membership…

And I will be guiding them to trade earnings every step of the way.

If you want the wallstreet.io software – and access to all the other Profit Revolution live shows, watchlists, and other perks, CLICK HERE to join the Profit Revolution.

Or click RIGHT HERE to find out more.

Watch the replay of today’s showhere when it goes live to see my earnings plan breakdown…

Until next time,

Mark Sebastian
Founder, Profit Takeover

VIX LIGHT

Despite the volatility spike the past two days, my VIX traffic light is still…

RED.

This means I expect volatility to stabilize or drop.

Vol is coming back down today – now it’s at about $20.60.

Image from Yahoo Finance

And SPY is making a somewhat inverse move – now at 449.87.

Image from wallstreet.io

As I mentioned on Jim Cramer’s show, generally, VIX and SPY will move in opposite directions –

Today is no different.

WEEKLY SCHEDULE (ET)

Monday 4/11: 10:30 am-11:00 am Profit Takeover

Tuesday 4/12: 10:30 am-11:00 am Profit Takeover

Wednesday 4/13: 10:30 am – 11:30 am Profit Takeover

Thursday 4/14: 11:00 – 11:30 am Foundations of Trading Preview

Friday 4/15: NO LIVE PROGRAMMING

TODAY’S WATCHLIST

These are today’s top-watched stocks with cheap options:

1. iShares US Transportation ETF (BATS:IYT)

IYT – this transportation ETF – is at a level we haven’t seen since March of 2021 – now at $241.95.

Image from wallstreet.io

A lot of names in this ETF have earnings coming up.

IYT could get crushed.

2. American Airlines Group Inc (NASDAQ:AAL)

AAL doesn’t look good – currently at – $16.81.

Image from wallstreet.io

There’s huge open interest in options here with about 600,000 contracts in puts…

AAL might go below $10.

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