For new traders, trading during Earnings Season can be either exhilarating or frustrating. For me, it is neither. I rely on statistics and statistics alone.
The first play of this season on JPM was based on a historical win/loss ratio of 75% in they type of play I normally use. Unfortunately, this season was one of the 25%. I can’t win every plan and accept it. It is what it is.
JPM blew out their earnings estimates, jumped far above where the historical average move takes it. It never stopped and my lonely iron condor expired at its max loss. I was position sized to lose no more than $201.
Next.
Here are this coming weeks plays…
GS - Entry on Monday, April 17th EOD. Earnings announcement is BMO on Tuesday. Past performance over last 4 ER’s is 75%. Average earnings on an Iron Condor sold in the last 5 minutes of open and closed EOD the following day - over 40% ROI.
ABT - Entry on Tuesday, April 18th EOD. Earnings announcement is BMO on Wednesday. Past performance over last 4 ER’s is 75%. Average earnings on an Iron Condor sold in the last 5 minutes of open and closed EOD the following day - 28% ROI.
AXP - Entry on Wednesday, April 19th EOD. Earnings announcement is BMO on Thursday. Past performance over last 4 ER’s is 75%. Average earnings on an Iron Condor sold in the last 5 minutes of open and closed EOD the following day - 52% ROI.
LRCX - Entry on Wednesday, April 19th EOD. Earnings announcement is AMC on Wednesday. Past performance over last 4 ER’s is 75%. Average earnings on an Iron Condor sold in the last 5 minutes of open and closed EOD the following day - 46% ROI. Here is what the LRCX iron condor looked like last ER (before and after):
Alternate to LRCX…
TSM - Entry on Wednesday, April 19th EOD. Earnings announcement is AMC on Wednesday. Past performance over last 4 ER’s is 75%. Average earnings on an Iron Condor sold in the last 5 minutes of open and closed EOD the following day - 43% ROI.
As always, please do your own due diligence.
Results from this week:
GS: +$104
ABT: -$198 (still open but expecting full loss)
AXP: +$ 97
TSM: +$ 68
LRCX was a no go as risk/position size was too high.