Earnings Spread Width
Setting key
earnings_spread_width
Default
5
What it does
Dollar width of each wing on the earnings defined-risk structure. Same mechanics as the mechanical engine spread width. The earnings engine defaults to 5-wide wings to keep the per-trade risk on binary events small.
When to change it
Size down to 3 on lower-priced names where a 5-wide spread is a large fraction of the stock price. Size up to 10 on high-priced names (NVDA, TSLA) where 5-wide may not capture meaningful premium.
Safe range
3 (tight) to 10 (wide).
Example
NVDA at $120. 5-wide wings: short call at $133, long call at $138. Max loss on the call side is $500 per contract minus credit received.