Earnings calendar
Announcements this week
Understanding the strategy
In the days before earnings, traders buy options to hedge or speculate on the move. This demand inflates IV — and inflated IV means higher premiums for covered call sellers.
If earnings beat expectations and the stock gaps above your strike, your shares are called away at the strike price. You miss the upside beyond the strike. Use lower delta (0.15–0.25) to build in more buffer.
After the announcement, IV collapses. Your short call loses time value rapidly — you can often buy it back at 30–50% of the original premium within hours of the release.
Score v4 applies a penalty: earnings in ≤3 days → −50%, ≤7 days → −30%, ≤14 days → −15%. The score already reflects risk — sort by Score for a balanced view.
Frequently asked questions
Should I sell covered calls before earnings?
Selling covered calls before earnings can generate elevated premiums due to high implied volatility (IV). However, if the stock gaps above your strike on a strong earnings beat, your upside is capped. The strategy works best when you expect the stock to move less than the market implies, or when you're comfortable with potential assignment at your strike price.
What happens to covered call premiums before earnings?
Option premiums typically expand in the days leading up to earnings because traders buy options to hedge or speculate on the move. This IV expansion inflates the premium you collect when selling a covered call. After earnings (IV crush), premiums collapse — which benefits the seller if the position is still open.
What delta should I use for a covered call before earnings?
Conservative approach: delta 0.15–0.25 (well out-of-the-money). This maximizes your buffer against an upside earnings surprise. Aggressive approach: delta 0.30–0.40 for higher premium but less protection if the stock gaps up. Avoid delta above 0.50 before earnings — assignment risk is too high.
What is IV crush and how does it affect covered calls?
IV crush is the rapid decline in implied volatility immediately after an earnings announcement. When IV drops, option premiums drop. If you sold a covered call before earnings and the stock stays flat, IV crush works in your favor — your short call loses value faster than expected, allowing you to buy it back cheaply or let it expire worthless.
How does CoveredCalls.live rank covered calls before earnings?
We use the CCL Score v4, which includes an earnings penalty: contracts with earnings in 3 days or less are discounted 50%, within 7 days 30%, within 14 days 15%. This means the top-ranked opportunities balance premium yield with earnings risk — not just raw annualized return.
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