Veteran options trader Brian Terry is back on Theta Profits with a different kind of earnings strategy. Most options traders place their earnings strategy trades before the earnings announcement. Brian places them after, while still benefiting from the elevated implied volatility.
Learn about Brian Terry’s earnings strategy in this video
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Brian Terry
Brian Terry is a retired corporate finance professional turned full-time options trader. Based in Central Florida, he’s known for sharing practical trading strategies in online communities and Facebook groups like “Conservative Covered Calls.” This is Brian’s third appearance on Theta Profits.
What makes this earnings strategy different?
Most traders aim to profit before an earnings announcement. Brian flips the script. His strategy waits until after earnings, when implied volatility (IV) is still elevated but the major uncertainty has passed. This approach enables traders to capitalize on IV crush while basing their decisions on how the stock has historically performed after earnings.
Step-by-step breakdown of Brian’s post-earnings strategy
1. Stock selection before earnings
Brian builds a watchlist in advance, screening for stocks with:
- Weekly options and strong liquidity
- Bullish fundamentals and technicals
- Favorable earnings movement history
He uses tools like OptionSlam to study how stocks perform 14 to 30 days post-earnings, going back up to 8 quarters.
2. The earnings event happens
Once earnings are announced, Brian checks:
- Did the stock avoid a major drop (e.g., not down 15%)?
- Is the stock flat or slightly up post-earnings?
If those conditions are met, he’s ready to strike.
3. Trade setup: Put credit spreads
- Type: Bullish put credit spreads only
- Width: Usually $5 wide
- Target credit: $0.80 to $1.20 per spread
- Short strike: Typically set at the 20-delta level, below pre-earnings price
- Days to expiration: 30-45 days
4. Trade management
- Take profit: Close when 50% of premium is captured
- Stop loss: Exit if losses hit 2x the premium received
- Average hold time: Just 8 days, capitalizing on rapid IV crush
Watch the video for the full breakdown of Brian’s earnings strategy.
Why this earnings strategy works
This earnings strategy leverages the elevated IV following earnings announcements without the unpredictable risk of holding through the event. Historical movement trends help identify high-probability setups, while defined-risk trades keep losses manageable.
Performance so far
In his recent test run:
- Win rate: 80%
- Average hold: 8 days
- Average return on risk: 8-10%
Who should consider this earnings strategy?
This approach is ideal for intermediate options traders who want:
- Higher win rates
- Short trade durations
- A system that removes earnings event risk
Brian rates the risk level as a 5 or 6 out of 10, making it a medium-risk strategy suited for accounts that favor defined-risk income trades.
Bonus tip: wheel starters
This strategy can also be used to start a wheel trade. Selling a naked put after earnings, if willing to own shares, is another variation Brian sees traders use.
- You may also check out our interview with Levi Woods about his way of trading the Wheel strategy
Books recommended in this video
Here are two options trading books recommended by Brian:
- “Options as a Strategic Investment” by Lawrence McMillan
- “Trading in the Zone” by Mark Douglas
More interviews with Brian Terry
If you liked this strategy, check out our previous interviews with Brian on:
To learn more about Brian’s after-earnings strategy, check out the recording from his recent Central Florida Meetup.
