Pre-trade checklist
Earnings options risk checklist
Before placing an earnings trade, write down the catalyst, expected move, max risk, exit rules, and what happens if the market opens beyond your planned range.
- Catalyst: report date, call timing, guidance, and related sector news.
- Move: implied move, historical earnings moves, and your expected range.
- Structure: long premium, short premium, spread width, expiration, and assignment exposure.
- Liquidity: open interest, volume, bid/ask spread, and realistic fills.
- Exit: profit target, max loss, stop logic, and time-based exit.
- Size: dollar risk small enough to survive a gap against you.
A checklist does not make a trade safe. It makes the assumptions visible before adrenaline takes over.
Primary reading: OIC options pricing overview · OIC long straddle strategy · Investor.gov options overview