Please ensure Javascript is enabled for purposes of website accessibility
Earnings Trader
Collect the Biggest Option Payouts Every Quarter

August 2, 2023

ConocoPhillips (COP) is due to announce earnings Thursday before the opening bell.

ConocoPhillips (COP)

Before I get to the trade, I will be holding a subscriber-only webinar this Friday at 12 p.m. ET. Click here to sign up. No worries if you can’t make it, we archive everything here at Cabot. You can find all the archived recordings here.

Remember, as is always the case, risk management is the key to long-term success when using high-probability option strategies. It’s the only way to truly allow the law of large numbers to work in your favor. Don’t get greedy and enamored by the quick nature of these trades. Stay disciplined!

ConocoPhillips (COP) is due to announce earnings Thursday before the opening bell.

The stock is currently trading for 115.50.

  • IV Rank: 7.4

Expected Move for the August 11, 2023, Expiration Cycle: 112 to 119


Knowing the expected range, I want to place the short call strike and short put strike of my iron condor outside of the expected range, in this case outside of 112 to 119.

If we look at the call side of COP for the August 11, 2023, expiration, we can see that selling the 122 call strike offers an 86.23% probability of success. The 122 call strike sits just above the expected move, or 119.


Now let us move to the put side. Same process as the call side. But now we want to find a suitable strike below the low side of our expected move, or 112. The 109 put, with an 85.90% probability of success, works.


We can create a trade with a nice probability of success if COP stays within the 13-point range, or between the 122 call strike and the 109 put strike. Our probability of success on the trade is 86.23% on the upside and 85.90% on the downside.

Moreover, we have a 5.6% cushion to the upside and a 5.6% margin of error to the downside.

If we look below at the earnings reactions since 10/25/2006, we can see that there have been only a few breaches of 4% to the upside or downside after an earnings announcement.

Net Change – At the Opening Bell


Full Bar – Price Movement Throughout the Day


If one wanted to make a trade, below are the potential strikes that make the most sense or are at least a starting point for a trade.

Here is the trade:


Sell to open COP August 11, 2023, 122 calls

Buy to open COP August 11, 2023, 127 calls

Sell to open COP August 11, 2023, 109 puts

Buy to open COP August 11, 2023, 104 puts for roughly $0.60 or $60 per iron condor.

Our margin requirement would be roughly $440 per iron condor. Again, the goal of selling the COP iron condor is to have the underlying stock stay below the 122 call strike and above the 109 put strike immediately after COP earnings are announced.

Here are the parameters for this trade:

  • The probability of success – 86.23% (call side) and 85.90% (put side)
  • The maximum return on the trade is the credit of $0.60, or $60 per iron condor
  • Max return: 13.6% (based on $440 margin per iron condor)
  • Break-even level: 122.60 – 108.40.

As always, if you have any questions, please do not hesitate to email me at

Andy Crowder is a professional options trader, researcher and Chief Analyst of Cabot Options Institute. Formerly with Oppenheimer & Co. in New York, Andy has leveraged his investment experience to develop his statistically based options trading strategy which applies probability theory to option valuations in order to execute risk-controlled trades. This proprietary strategy has been refined through two decades of research and real-world experience and has been featured in the Wall Street Journal, Seeking Alpha, and numerous other financial publications. Andy has helped thousands of option traders learn and implement his meticulous rules-driven options trading strategies through highly attended conferences, one-on-one coaching, webinars, and his work as a financial columnist. He currently resides in Bolton Valley, Vermont and when he’s not trading, teaching and writing about options, he enjoys spending time with his wife and two daughters, backcountry skiing, biking, running and enjoying all things outdoors.