Pre-Earnings days are here again…

Update: This list is based on my research and backtesting. Although I use CML tools, this list did not come from CML nor has it been vetted by them. Buy at your own risk which you already do.

Each quarter, I compile a list of pre-ER candidates based on CML backtests. Attached is the Q4 2018 list. Over the next few weeks, I will continue to modify the spreadsheet to add new ideas, custom setups and confirmed earnings dates. The suggested entry date is the date on which the backtest is based. The yellow highlight means it’s currently in entry week. You can start watching earlier for a good entry or add to a position after this date. This is a starting point for taking a long position in a stock before earnings. Green highlights indicate that the candidate has 100% win rates in more than one setup.

I include only setups and backtests with 100% win rate over at least four quarters, an average return per trade of 40% or more, stocks with weekly options, and medium to high options liquidity. There are many other pre-ER candidates in CML but my preference is to stick with the 100% winners as long as they provide a diverse selection.

Some interesting observations include:

  • WYNN and SWK are the only stocks with a 100% win rate over more than 4 quarters
  • CML has introduced a new pre-ER straddle that I like. It’s in the spreadsheet under the Custom column
  • Many of our favorites have fallen off the 100% win rate list (BA, INTC, MA, PYPL and others)
  • SWK emerges as the best candidate this quarter with 100% win rate across five setups