Summary of SPY and SPXW Options Strategies for Earnings Season

In the article by Koen Hoorelbeke, the focus is on the upcoming Q2 earnings season, which is set to begin with major banks reporting on July 14, followed by significant tech companies at the end of July. The author outlines three distinct options strategies tailored to different market views during this earnings season, utilizing SPXW and SPY weekly options that expire in alignment with the earnings reports.

1. Bullish View: Bank Week Strategy

For those with a positive outlook on bank earnings, a bull call spread is recommended for the SPXW July 17 expiry. This strategy involves:

• Buying 1 SPXW 17 July 2026 7,450 call
• Selling 1 SPXW 17 July 2026 7,550 call

The net debit for this position is approximately 58 index points (~$5,825 per contract), with a maximum risk equal to the debit paid. The maximum gain is around $4,160 if the SPX closes at or above 7,550 at expiry.

2. Income View: Tech Week Strategy

For the tech earnings reports expected from July 29 to 31, a bull put spread is suggested to capitalize on the elevated earnings premium. The structure includes:

• Selling 1 SPY 7 August 2026 $725 put
• Buying 1 SPY 7 August 2026 $710 put

This strategy generates a net credit of approximately $2.21 per share (~$221 per contract), with a maximum risk of about $1,279. The break-even point at expiry is approximately $722.79.

3. Direction-Neutral View: Volatility Surface Strategy

For a direction-neutral approach, a risk reversal strategy is proposed for the SPY August 21 expiry. This involves:

• Selling 1 SPY 21 August 2026 $720 put
• Buying 1 SPY 21 August 2026 $775 call

This strategy provides a net credit of approximately $1.98 per share (~$198 per contract) and carries an undefined risk, as the short put has uncapped downside below $720.

Final Thoughts

The article emphasizes the importance of timing and structure in options trading, particularly during earnings season. By selecting the appropriate expiry for each earnings window, traders can effectively position themselves in the market. The strategies discussed are intended for educational purposes and should be approached with careful consideration of individual risk tolerance and market conditions.