Earnings Short Strike Delta

Setting key
earnings_defined_risk_short_delta
Default
0.20

What it does

Short strike delta for the defined-risk earnings structure (iron condor or credit spread). Richer than the mechanical engine's 0.20 default: the trade is short-lived and defined-risk, so it takes more premium per unit of width. The earnings engine also supports naked structures with a separate naked_short_delta of 0.16 (one standard deviation), but naked is off by default.

When to change it

Lower to 0.20 for wider breakevens on volatile names. Raise to 0.40 for more premium but higher risk of being tested through the report.

Safe range

0.16 (wide, high probability) to 0.40 (tight, more premium).

Example

NVDA earnings. Stock at $120. 0.30 delta put strike approximately $108, 0.30 delta call strike approximately $133. The condor profits if NVDA stays in that range through the post-earnings expiration.

Financial Information Disclaimer

This site provides general information about ACondor, a software tool for automating options trading strategies. Nothing on this site is investment, tax, or financial advice. Options trading involves substantial risk of loss. Past behavior of any strategy does not guarantee future results. Consult a licensed financial professional before trading options. ACondor may earn a commission from affiliate links at no extra cost to you.