🔍 How to Trade Earnings with Options? Iron Condor for Safer Bets?
Earnings Season Is Here — $Microsoft(MSFT)$ , $Meta Platforms, Inc.(META)$ , $Apple(AAPL)$ , $Amazon.com(AMZN)$ , and $Qualcomm(QCOM)$ are all reporting!
But this round of earnings clearly doesn't play fair. Goldman Sachs pointed out a typical pattern of "negative asymmetry": good news doesn't lead to much upside, but bad news causes massive sell-offs! Netflix dropped 5% after earnings, ASML plunged 8%, and Texas Instruments tanked a staggering 13%.
At the same time, Goldman's speculative trading index is nearing all-time highs — retail investors are back, and the options market is on fire 🔥.
So how can smart investors manage risk in this volatility and still amplify returns? Let’s dive into a practical strategy for this earnings season: the Iron Condor, betting on Meta and Microsoft’s reports!
🔍 How to Trade Earnings with Options?
Take advantage of the surge in implied volatility (IV) before earnings by selling volatility. Once earnings are released, IV crashes — and sellers profit, even if the stock barely moves. You're essentially betting that: “It will move, but not too much.”
✅ Ideal Underlyings?
Large-cap tech stocks are best, such as: AAPL 🍎 / MSFT / AMZN / META 👓
Why Use the Iron Condor?
Here are three strategies to consider:
❌ a. Naked Straddle (Sell Call + Sell Put)
The “nuclear” play for selling volatility — but it requires deep pockets.
If you're not ready to catch a falling knife (i.e., buy the stock), don’t do this.
✅ b. Iron Condor (A safer version of a Strangle)
The core idea: sell a Call + Put combo, and buy protective legs farther out to cap max loss.
Think of Iron Condor as a “calculated risk with boundaries.”
📈 Example: $Apple(AAPL)$
Current price: $211, earnings report coming soon.
You can either set custom target prices yourself or use the Iron Condor feature in the Tiger app.
DIY Example:
Long Put @ $200 – Protective leg to cap maximum loss
Short Put @ $205 – Predicting the stock won’t drop below this level after earnings
Short Call @ $225 – Predicting the stock won’t break above this level
Long Call @ $230 – Another protective leg to limit potential loss
Breakeven range: roughly $205 - $225 Even if the price moves beyond that, your protective legs limit the loss.
Don’t be greedy with the premium — buying the right protection is key! Regardless of the outcome, this strategy has defined risk and boundaries, which helps keep your mindset steady and calm.
💬 Discussion Time:
Do you trade options during earnings season?
Have you ever bet on earnings with options? Was it a win or a wipeout?
Do you prefer Straddle, Strangle, or Iron Condor?
Which company are you most eager to bet on this earnings season?
Who is your favorite options teacher? (tag your teacher in tiger community or name your best teacher from other forums)
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At this stage, I am still in early learning and have not placed any trades. I am following the Tiger community closely to understand how traders manage risk and use volatility. The Iron Condor looks like a smart way to stay protected while betting on limited price movement.
I do not have a specific options teacher yet, but I hope to learn more from the community. I am especially interested in how others are approaching Meta and Microsoft this week. Looking forward to learning and growing, and maybe trying my first trade soon.
@Tiger_comments @TigerStars
I have tried strangles and straddles and also tried iron condors before.
The problem nowadays is that volatility is changed, small narratives and statements can greatly get stock valuations down or up.
I had a bad experience with Adobe last season when the price just tanked from the 550 range to 400 range and all my strangles and condors became useless.
This scared me for a bit and I laid off for a while from earnings period trades. However slowly recovering.
The problem lies in predicting the move.
Idea: use expected moves to predict the movement and add a safety margin. This is what I am doing recently and expected move can be found in Tiger brokers and also in yahoo. This can be used fortuitously.
Why Iron Condor? It capitalizes on high implied volatility during earnings. Profits emerge when stocks move within a predictable range.
Read more in my article.
A stock option (also known as an equity option), gives an investor the right, but not the obligation, to buy or sell a stock at an agreed-upon price and date. There are two types of options: puts, which is a bet that a stock will fall, or calls, which is a bet that a stock will rise. Because it has shares of stock (or a stock index) as its underlying asset, stock options are a form of equity derivative and may be called equity options. @Tiger_comments
Iron condor does look like a safe strategy to manage risk and to avoid crazy losses. I think it is helpful that Tiger has it inbuilt to help novices like me. I look forward to more combinations built in by tiger. As a diehard Apple fan, I am most looking forward to Apple’s earnings. I also look forward to Microsoft as im optimistic about it. I recall @Tiger_Academy having run a series before and it was helpful. Lookign forward to more comprehensive sharing also by the community @Success88 @Fenger1188 @SR050321 @SPOT_ON @LuckyPiggie @Universe宇宙 @DiAngel @HelenJanet @Wayneqq @Fenger1188 come join