In this Theta LIVE session from February 4, 2026, three experienced options traders share how they actually approach earnings trades in real market conditions. The conversation covers volatility, trade structure, and risk management — followed by extensive live Q&A from the audience.
Watch the Theta LIVE recording here
The panel
This Theta LIVE session brings together three experienced options traders who actively trade earnings events, each with a distinct but complementary approach.
- Daniel Nikolaides focuses on volatility, statistics, and defined-risk earnings structures.
- Christopher Hejl emphasizes efficiency, learning velocity, and calendar-based earnings trades.
- Eric Goldreich combines long-term investing experience with volatility and directional earnings strategies.
This article is based on an edited replay of the live session.
Event sponsor: Earnings Watcher
This Theta LIVE session was organized in cooperation with Earnings Watcher, a platform designed to help options traders identify and analyze earnings trades using historical data, expected moves, and volatility behavior. As part of the collaboration, Theta Profits readers receive 33% off Earnings Watcher’s annual plan via the discount link included with this article.
Why earnings trades are different
Earnings trades are not about predicting direction. They are scheduled volatility events, where options are priced around uncertainty rather than price targets.
A recurring theme in the session is that many traders struggle with earnings because they treat them like normal trades. In reality, earnings trades require a different mindset, where volatility behavior, expected moves, and execution matter more than being “right” on direction.
Understanding how implied volatility ramps up before earnings — and collapses immediately after — is the foundation of all earnings trading strategies discussed in this session.
Daniel Nikolaides: Trading earnings through volatility and structure
Daniel opens the session by framing earnings trades as volatility opportunities, not directional bets.
He explains how options markets price an expected move going into earnings and why traders should focus on whether that pricing looks rich or cheap relative to historical behavior. Rather than looking only at closing prices, Daniel emphasizes analyzing intraday extremes, since those are what cause blow-ups in short-volatility trades.
Daniel primarily uses defined-risk structures such as iron condors, iron flies, and calendars, carefully calibrated around historical moves and market positioning. A key part of his process is understanding where dealers may dampen or amplify price movement based on options positioning.
Risk management plays a central role. Daniel stresses that earnings trades should be sized conservatively and repeated over many events to allow the statistical edge to play out over time. One trade does not matter — the long-term process does.
Christopher Hejl: Calendars, efficiency, and accelerated learning
Christopher approaches earnings trades from a different angle: time efficiency and learning speed.
He explains why earnings trades are attractive because they compress risk and outcome into a very short window. Trades are typically entered shortly before earnings and resolved the next day, making them ideal for traders who want fast feedback.
Christopher focuses primarily on calendar spreads, selling short-dated options with elevated implied volatility while buying longer-dated options with lower volatility. This structure benefits from IV crush while maintaining defined risk.
A key insight from Christopher’s presentation is that execution and commissions matter. He avoids multi-leg structures like iron flies when fees or liquidity reduce edge, and prefers simple structures that scale cleanly.
Christopher also highlights that calendars often result in either full losses or full wins, which makes conservative sizing essential. His approach prioritizes survival, consistency, and repeatability over maximizing returns on any single earnings trade.
Eric Goldreich: Combining volatility and directional earnings trades
Eric brings a longer-term investing perspective to earnings trades.
Because he closely follows around 75 companies, reads earnings reports, and listens to conference calls, Eric sometimes takes directional earnings trades using defined-risk spreads. He is comfortable accepting full losses in exchange for asymmetric payoffs when he believes he has company-specific insight.
In addition to directional trades, Eric discusses IV-based strategies, including pre-earnings volatility plays where traders aim to profit from IV expansion before the announcement. These trades are typically held for only a few hours and closed before earnings, keeping risk tightly controlled.
Eric emphasizes that liquidity is non-negotiable. Poor liquidity and wide spreads can erase edge instantly, especially in short-term earnings trades. He also stresses the importance of closing trades early rather than squeezing for maximum profit, reducing gamma risk and emotional stress.
Risk management and execution lessons
Across all three presentations, the same principles repeat:
- Earnings trades must be small relative to account size
- Liquidity matters as much as strategy
- Defined risk beats undefined risk for most traders
- Losses must be accepted quickly and unemotionally
- Process matters more than individual outcomes
Several panelists point out that if a trader cannot sleep comfortably with an earnings position on, the trade is simply too large.
Live Q&A: practical earnings trading questions
A large portion of the session is devoted to audience Q&A, covering topics such as when to close trades after earnings, whether to let positions expire, how many earnings trades to run per cycle, and how to think about diversification across sectors.
These discussions add practical depth and show how experienced traders adapt principles to real-world situations.
