Welcome to this walkthrough of the Runners strategy for earnings.

This guide will summarise the key points you need to know about researching and implementing this strategy.

Be sure to take the quiz at the end to test your understanding and receive personalised feedback.

Earnings & IV

• Implied volatility (IV) rises in the weeks and days leading to an earnings announcement. This is called IV Rush.
• IV then sharply drops on the first trading day after the release. This is called IV Crush.
• On the first trading day after an earnings release, IV returns to normal levels, and options behave as they would on any random day.

Playing Post Release

The Runners strategy avoids the IV rush and crush dynamics by being executed after the release.

This makes it an easy strategy to pick up for earnings plays.

The concept behind this strategy is straightforward: capitalise on the momentum that follows an earnings release.

Some stocks make significant moves after earnings, and these moves can often continue for several days. The goal is to ride this momentum for potential gains.

Example

Here's an example of a stock that tends to make significant moves after earnings: PLTR.

Below is a breakdown of the past earnings moves for PLTR. Let's focus on the Day of Release, Post Release Move, and Move Duration columns.

• By day-of-release we refer to the first trading day after the earnings release, which is also when the IV crush occurs.
• The post-release day is the following day.