Establishing Our Option Portfolios in the Heart of Earnings Season – April 04, 2023
Populating our covered call writing and put-selling portfolios during earnings season can be challenging but nothing we can’t overcome. This article will provide ideas as to how to craft our portfolios using elite-performing securities while still avoiding the risk of earnings reports (ERs) using our BCI screening reports.
Resources to consider
- Stocks that report earnings in the 1st week of a monthly contract
- Stocks with weekly options
- Stocks that do not report in the current contract cycle
- Exchange-traded finds (ETFs)
Premium Stock Report (partial screenshot) crafted on 10/21/2022 for the start of the November 2022 contracts
Note the following:
- Stocks above the red line report in the 1st week of the November contracts. These securities become eligible after the report passes and will still generate 3 – 4 weeks of time-value premium
- Green arrows point to stocks with weekly options. We can sell Weeklys that months and just avoid the 1-week of the ER
- All stocks in gold cells report during the November contracts
Eligible stocks during the November contracts
The purple arrow shows eligible stocks that do not report during the November contracts and open for consideration.
Exchange Traded Funds (ETFs)
ETFs do not report earnings. Therefore, all of these eligible securities are available for our consideration even during earnings season. Our typical reports will have between 15 and 30 listed. Here is a partial screenshot of the ETF Report crafted on 10/26/2022 after market close:
Discussion
During earnings season our pool of eligible underlying securities for our option portfolios will be somewhat limited. We can overcome this challenge by using stocks that report early in the contract once the reports pass, stocks with weekly options, stocks that do not report in that cycle and ETFs. At BCI, we understand that there will be hurdles we must face, but counter that fact with reasonable solutions.
Author: Alan Ellman