Earnings Play
A trade structured around a company's quarterly earnings announcement, designed to profit from the resulting price move or volatility change.
Explained Simply
Earnings plays come in two flavors: directional (betting on the stock moving up or down after earnings) and volatility (betting on the size of the move regardless of direction). Buying calls or puts is directional. Buying straddles or strangles is a volatility bet. Selling premium (iron condors, short strangles) bets that the stock won't move as much as options are pricing in. The key insight is understanding the "expected move" priced into options and whether you think the actual move will be larger or smaller.
How Tradewink Uses Earnings Play
Tradewink's earnings play engine activates 5-7 days before a company's earnings date. The AI analyzes historical earnings moves, current IV rank, whisper numbers, and sector trends to estimate the probable move. If the estimated move exceeds the options-priced expected move, it recommends long straddles/strangles. If the estimated move is smaller, it recommends premium-selling strategies.
Related Terms
See Earnings Play in action
Tradewink uses earnings play as part of its AI trading signal pipeline. Start getting signals that use this concept to find real opportunities.