Earnings season basics
Earnings season happens 4 times per year, roughly:
January: Q4 results
April: Q1 results
July: Q2 results
October: Q3 results
Banks (JPM, GS) report first, followed by big tech (AAPL, MSFT, NVDA), then retail (WMT, TGT).
What actually moves the stock
It's not about beating estimates — it's about beating expectations AND forward guidance:
Revenue beat/miss: Top-line growth matters most for growth stocks
EPS beat/miss: Earnings per share vs. consensus
Forward guidance: This moves the stock more than the actual results
Key metrics: Subscribers (NFLX), deliveries (TSLA), cloud growth (AMZN/MSFT), AI revenue (NVDA)
The expected move
Options pricing implies an "expected move" for each earnings report. You can calculate it from the at-the-money straddle price. If NVDA's expected move is +/-8%, and it only moves 5%, options sellers win.
IV crush explained
Implied volatility (IV) is elevated before earnings because the outcome is uncertain. After the report, IV collapses — this is "IV crush." It means:
Buying options before earnings is expensive: — you need a bigger move to profit
Selling options captures IV crush: — but the risk is unlimited on naked positions
Spreads help: — defined risk strategies reduce IV crush impact
Practical tips
Trade the reaction, not the prediction — wait for the report, then trade the trend
Watch the first 30 minutes of the next trading day — the initial post-earnings move often continues
Guidance > results — a company can beat estimates and drop if guidance disappoints
Sector read-through — NVDA earnings affect AMD, AVGO, SMH. JPM earnings affect BAC, GS, XLF