My New Strategy for Earnings

Apr 18, 2021

We just added a new trading strategy to our toolbelt, and I want you to know how powerful this can be.

Usually, traders will focus on betting that a stock will go higher or lower.

In other words, they are predicting direction.

But what if you think the stock is priced just about right?

What if you think the stock simply will not move as much as Wall Street expects?

At LikeFolio, we asked ourselves the same question.

You see, every Sunday of the earnings season, we publish our Earnings Sheets for members. In this weekly report, we give an Earnings Score to each stock we cover that is reporting earnings in the upcoming week.

The LikeFolio Earnings Score can be anywhere from -100 (most bearish) to +100 (most bullish), with anything near zero being a neutral score.

For large negative and large positive scores, the directional strategy is really clear, and we’ve had a fantastic time profiting from those big, fast moves.

But lots of companies end up with earnings scores between -15 and +15… suggesting that the stock might not move much after earnings are reported.

So, we just added a new earnings trading strategy designed to profit when a stock’s price stays relatively steady after earnings… or as some like to call it… “moves sideways.”

It’s called the Iron Condor, based on an existing options strategy, and we are extremely excited to add it to our Earnings Sheets and Earnings Strategies Master Class series for members starting this upcoming season.

Here are a few of the major benefits of being able to trade this new “neutral” strategy:

  • Profit from lower-than-expected stock movement: This is huge because Wall Street tends to overestimate how much a stock will move after an earnings report. By employing this strategy, we turn Wall Street’s volatility fears into profit opportunities.
  • Big profit opportunity: With the Iron Condor strategy, you’re able to clearly define the maximum risk and reward for the trade. It’s not uncommon to construct Iron Condor trades that have a max profit of more than 100%!
  • Strictly defined risk: With this strategy, you know EXACTLY how much it’s possible to lose before you enter the trade. Many times, we can reduce this maximum risk to under $100 per trade — giving you an incredible opportunity to take more trades, with less money, every week of the season.
  • Limited time frame: We use this strategy during the five-day profit window around each stock’s earnings release. In on Monday, out by Friday. It’s fast, fun, and keeps the profit opportunities flowing each and every week.
  • More trades! Now we don’t have to focus only on the stocks with big LikeFolio earnings scores. Everything is fair game — whether the signal is bullish, bearish, or neutral!

Obviously, I’m extremely excited to add this strategy to our earnings trading approach this season.

LikeFolio Earnings Season Pass members can access the full video breakdown and tutorial in our Master Class Earnings Trading Strategies series.

If you haven’t joined yet… now is a great time… Week 1 of this season starts tonight, and with this new strategy addition, we’ve just opened a whole new window of opportunity.

Enjoy!

Andy Swan,
Founder, LikeFolio