Happy Memorial Day to all US based readers!
Spring 2022 Earnings Season is coming to a close. This is my second favorite time per ER season - trading results are in and can be evaluated for the seasons win / loss ratio and profit factor. (My favorite time is just before each ER season as I review the rules of my system and plan for implementation.)
As of this writing, there were a total of 32 closed plays plus 1 open play on HPQ (more on this below), each of which risked on average $250 and represented a position size of 2.5% of a $10,000 account. For the closed plays, there were 21 wins, 10 losses, and 1 break even, yielding a win/loss ratio of 67.74%, excluding the break even. The total wins produced $3,421 in profit and the total losses produced -$1,364. Therefore the profit factor was 2.51. Net gain was $2,057 or 20.57% account growth over the period. Note that the current open play on HPQ has $384 in profit locked in but cannot be factored in the above numbers until closed next week.
All of the ER option plays were communicated and reviewed by a select group of premium members of the Swing Trading / ER Strategies group at Optionsplayers.com.
For example, last Sunday evening, 22 May, the following was presented:
Iron Condors Candidates for Upcoming Week
SPLK Entry: Wednesday, 25 May (Past performance 3 out of 4 wins)
Exit: EOD on Thursday, 26 May
NVDA Entry: Wednesday, 25 May (Past performance 3 out of 4 wins)
Exit: EOD on Thursday, 26 May
BIDU Entry: Thursday, 26 May (Past performance 3 out of 4 wins)
Exit: EOD on Friday, 27 May - normally poor slippage
WDAY Entry: Thursday, 26 May (Past performance 3 out of 4 wins)
Exit: EOD on Friday, 27 May – normally poor slippage
MRVL Entry: Thursday, 26 May (Past performance 3 out of 4 wins)
Exit: EOD on Friday, 27 May
Directional Candidates for Upcoming Week
HPQ Jun03 Delta 30 to 40 calls, Entry: Monday, 23 May, Exit: Tuesday, 31 May
Summary to date of Spring 2022 Earnings Season Account
Review of HPQ play
Every Sunday evening, the premium Swing Trading / ER Strategies group filters all equities with confirmed earnings reports in the upcoming two weeks for the highest average increase in implied volatility of their options prior to their earnings. Each chart is reviewed to identify the top candidates (if any) with potential daily price action patterns for direction plays.
HPQ made the cut last week:
Six HPQ Jun03 $37 calls were entered for $0.77 each ($462 risk) fifteen minutes before close on Monday with a plan to exit if the loss exceeded $250.
HPQ performed well over the week. Given the highly volatile price environment of the current market, risk was adjusted out of the play during the week (adjustments will be covered in next weeks post), the position at close on Friday was as follows:
We will be opening up the Swing Trading / ER Strategies group to a limited number of new subscribers for the Summer 2022 Earnings Season beginning in mid-July for OP members at optionsplayers.com or non-OP members here on greengoosetrader.substack.com. If you are interested in more details, please send an email to greengoosetrader@gmail.com.