How to Avoid Earnings When Selling Puts

Why this is worth five minutes

A short put makes money slowly and loses it quickly. The slow part is time decay. The quick part is a gap: the stock opens 10–20% lower after a report and is already through your strike before you can do anything. Earnings are the most common cause of that gap, and they are the one cause you can see coming, because the date is published in advance.

The premium also tells you. In the weeks before a report, implied volatility rises on any option whose life includes the report. So the put that looks like the best yield on your screen is often just the one that spans earnings.

Check 1: find the next earnings date

Most US companies report every three months, roughly 13 weeks apart. The most reliable source is the company’s own investor relations page. Broker platforms, Nasdaq’s earnings calendar and most screeners show the same information, usually pulled from a data provider.

Check 2: is the date confirmed or estimated?

This is the check people skip. Companies usually confirm the exact date only a few weeks ahead. Before that, calendars show an estimate based on when the company reported in the same quarter last year. Estimates are often right to within a few days, but a few days is exactly the margin that matters.

If the date is still an estimate, treat it as a range, not a day. Leave at least a week between your expiry and the estimated date, or wait until the company confirms.

Check 3: before the open or after the close?

What you are avoiding is not the report itself but the first trading session that reacts to it.

• After the close on Thursday: the stock reacts on Friday. A put expiring that Friday is fully exposed.
• Before the open on Friday: same result. Friday’s expiry is exposed.
• After the close on Friday: the stock reacts on Monday. Friday’s expiry is clear.

A put that expires "the same week as earnings" can be either safe or fully exposed, depending on the hour of the report.

Check 4: pick the expiry by calendar, then by premium

Once you know the reaction day, choose the last expiry that ends before it. Only then compare premiums.

There is a quick way to confirm you have it right. Look at the implied volatility of two neighbouring expiries. If the later one is noticeably higher than the earlier one, the market is telling you an event sits between them. The earlier expiry is the one that avoids it.

Check 5: know what avoiding it costs

Skipping the event means accepting less premium. That is the trade-off, and it is better to see it in numbers than to discover it later. An illustrative example with a stock at $80 that reports in 19 days:

• Put A: 30-day $75 put, pays $1.90. It spans the report. Return on collateral: $1.90 / $73.10 = 2.6% in 30 days.
• Put B: 16-day $75 put, pays $0.70. It expires before the report. Return on collateral: $0.70 / $74.30 = 0.9% in 16 days.

Put A pays almost three times as much, and per day it still pays about 50% more. That extra is the price the market puts on holding through the report. If the stock gaps 15% to $68, Put A is $5.10 a share underwater after the premium, a $510 loss on a trade that offered $190. Put B was never in the market that day.

Neither choice is wrong. The mistake is taking Put A because it had the highest yield and never noticing why.

Already short a put with earnings coming?

• Close it. If you have already captured half or more of the premium, buying the put back before the report is usually the simplest answer.
• Do not expect a roll to help. Rolling to a later expiry keeps you in the trade through the report. Rolling only avoids earnings if you roll after the report.
• Reduce size. Closing part of the position cuts the damage a gap can do while keeping some of the premium.
• Hold on purpose. This is reasonable if you want the shares at that strike, your strike is beyond the option market’s expected move, and the position is small enough that a 20% gap is uncomfortable but not serious.

What avoiding earnings does not protect you from

• Early warnings. Companies sometimes cut guidance or pre-announce results in the weeks before the scheduled date.
• Other scheduled events. FDA decisions and clinical trial results for drug companies, court rulings, regulatory decisions and investor days can move a stock as much as earnings. See how to check catalyst risk before selling options.
• A competitor’s report. A bad result from one company in a sector often drags the rest down the same day.
• Market-wide selloffs. No calendar helps here. Position size does.

Quick answers

How many days before earnings should I stop selling puts? It is not about days. A put is clear of earnings if it expires before the first session that reacts to the report, and exposed if it does not. With a confirmed date, a put expiring the day before is clear. With an estimated date, leave about a week.

Is it a good time to sell puts right after earnings? It is the calmest window, because the next report is about three months away. Premiums are lower, though, because implied volatility falls once the report is out (IV crush).

Does the same apply to covered calls? Yes for the calendar checks. The risk is different: a gap up means your shares are called away below the new price, and a gap down hurts the shares you hold.

Should I ever sell a put through earnings deliberately? Some sellers do, to collect the higher premium, with small size and strikes outside the expected move. That is a different trade from the one this page describes, and it should be a decision, not an accident.

How TickerRisk does these checks

The wheel scanner and the cash-secured put scanner mark any candidate whose earnings fall before the option expires, and there is a filter to hide those candidates entirely. Each stock’s 0–100 risk score is recalculated for the expiry you pick, so the same stock can read low for a two-week put and high for a five-week put that spans the report. The events calendar lists upcoming earnings across the S&P 500.

One limitation to know about: our earnings dates come from market data providers and can be estimates until the company confirms. For a trade that depends on a few days either way, check the company’s investor relations page as well.