During earnings (result) season, markets become highly volatile. According to expert Shubham Agarwal, smart traders avoid risky directional bets and instead use options strategies like spreads to manage risk and maximize returns.
ЁЯОп Why Result Season is Tricky
- Sudden price swings after earnings
- Unexpected results can reverse trends
- High volatility increases risk
ЁЯСЙ Simple buy/sell trades can be dangerous without hedging
ЁЯТб Smart Strategy: Use Option Spreads
Instead of taking a naked position, experts suggest using spread strategies:
ЁЯУИ Bullish Strategy: Call Spread
How it works:
- Buy a Call option
- Sell a higher strike Call option
ЁЯСЙ Example on Nifty 50:
- Buy 24,200 CE
- Sell 24,500 CE
тЬЕ Benefit:
- Limited risk
- Lower premium cost
- Profit if market goes up moderately
ЁЯУЙ Bearish Strategy: Put Spread
How it works:
- Buy a Put option
- Sell a lower strike Put option
ЁЯСЙ Example:
- Buy 24,200 PE
- Sell 23,900 PE
тЬЕ Benefit:
- Protection against downside
- Reduced cost compared to buying only Put
ЁЯза Why Smart Money Uses Spreads
- Controls risk in volatile markets
- Reduces premium cost
- Avoids big losses from sudden reversals
ЁЯСЙ Perfect for result season uncertainty
тЪая╕П Common Mistakes to Avoid
- Taking naked option trades
- Ignoring volatility (IV spike)
- Overleveraging positions
ЁЯСЙ Result season punishes aggressive traders
ЁЯУК Pro Tips
- Choose stocks with expected big moves
- Enter before results, exit quickly after
- Focus on risk-reward ratio
ЁЯФН Final Takeaway
- Result season = high risk + high opportunity
- Use spreads instead of direct trades
- Stay disciplined and hedge your positions
ЁЯСЙ Smart money doesnтАЩt gamble тАФ it manages risk smartly.
