Investors can't always plan when there is going to be news that moves a stock. One exception is earnings. Next week, investors will get quarterly results from tech giants Apple (AAPL), Microsoft (MSFT), and Meta (META), automakers like Tesla (TSLA) and General Motors (GM), and consumer companies such as Starbucks (SBUX) and Colgate-Palmolive (CL). For those who trade options, it could be a big opportunity to cash in.
All Star Charts chief options strategist Sean McLaughlin says the advantage of trading options during earnings season is that "you can clearly define your risks in a way that a stock trader cannot." McLaughlin explains using an example of how a stock trader using a stop-loss order could potentially take a steeper loss than an options trader who bought long calls.
Learn more about how McLaughlin trades options around earnings season in the video above.
To watch more expert insights and analysis on the latest market action, check out more Catalysts here.
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This post was written by Stephanie Mikulich.