Earnings are one of my favorite catalysts for trading options.

However, it’s crucial to know the right and wrong way to trade them.

One of the most effective methods for trading earnings I’ve ever come across is called “overnight trading.”

There are several reasons I love this strategy.

1. It’s simple (all you need to do is make ONE trade)
2. It offers the potential for fast profits in less than 24 hours
3. It also provides big move potential depending on the earnings result

Like yesterday in The War Room, when I closed a 41% overnight winner on an earnings play using this exact strategy.

Let me set the table for how it all went down…

On Monday, I noticed Oracle (ORCL) was set to report earnings the next day.

ORCL’s options were implying a 7.1% move in share price post-earnings. The options volume in Oracle was 3.9x normal, with puts leading calls 10:9.

Of course, this pre-earnings data is all theory.

The truth is nobody knows which direction a stock will go ahead of earnings. Which is why it’s highly risky to bet on only a call or a put option. If you’re wrong, you can lose big.

However, my overnight trading strategy allows me to avoid the risk of being wrong. Instead, I get positioned on both calls AND puts, that way I could make a profit as long as there’s a big move in either direction.

And on Tuesday ahead of earnings, I got that big move on ORCL.

The tech stock rallied 8% after beating earnings expectations – reporting $1.39 a share on $13.31 billion in revenue. Analysts polled by LSEG forecasted $1.32 a share on $13.23 billion, so this was a nice double-beat quarter.

As you’ll see in the chart above, ORCL made a big move to the upside after earnings, and I got positioned ahead of time to close it for a 41% overnight winner.

That’s the power of the overnight strangle.

If there’s an upcoming catalyst like earnings, I can get positioned for a potential profit ahead of a big move – up OR down.

And with so many stocks reporting earnings throughout the year, there are plenty of opportunities to make this trade over and over again.

While I love using this strategy, the best part is seeing our War Room members also use it to scoop up profits.

Here’s what some of them had to say after the ORCL trade…

YOUR ACTION PLAN

The 41% overnight winner on ORCL is just one of the many examples of profitable overnight trades I’ve closed in The War Room.

To learn more about the potential of this strategy, click here.