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Earnings land inside my option's expiry. Close, or hold through?

You sold an option and only now noticed the earnings date sits before expiry. You have two real choices. Here they are, with the gap worked out in dollars.

Options guide · 8-minute read · Updated 2026-10-26

What is actually happening in your account

Right now, nothing. The put you sold is probably near the price you sold it, maybe a little higher because the market is pricing in the report. Your cash is set aside. The stock is where it was.

What has changed is the odds. A normal day moves a stock a percent or two. Earnings can move it 10% or 20% overnight, in either direction, with no chance to act in between. Your strike was chosen for normal days.

That is the whole problem. The option sits across a Binary event, and binary events are where the wheel strategy takes its biggest hits.

The numbers (an illustration, not a trade idea)

XYZ trades at $50. You sold a 30-day put with a $45 strike for $1.50 and collected $150. Earnings are in 10 days. With 20 days left after the report, the put sits at about $1.40 today.

Here is what the report can do by the next morning, and what each result means for you.

Notice two things. The good side stops at +$150 whatever happens. The bad side has no floor. And in the bad rows, buying back and being assigned cost about the same, because the put is now almost all real value.

Choice one: close before the report

Buy the put back the day before earnings. Today it costs about $1.40, so you keep $10 of the $150. Almost nothing.

That feels like a waste. It isn't. The $150 was pay for normal days, and most of it is still sitting in the put because the report is ahead. Closing ends the trade before the one day that isn't normal. You just got out before the part of it you never meant to take.

If the put has already gained, say it trades at $0.80, closing locks in $70 and still removes the event. Our guide to closing options before expiration covers the order.

Choice two: hold through, on purpose

Sometimes holding is right. The test is one question: would you buy 100 shares at $45 if the report is bad and the stock opens at $38?

If yes, with the cash already set aside and the size small enough that −$550 fits your rules, hold. You are being paid to make a real offer on a company you want. A bad report is a discount you planned for.

If no, you are holding for the premium alone. That is a coin flip with a capped win and an uncapped loss. The $150 is not worth it.

There is a middle choice. Roll the put out past the report, to an expiry that does not include it. See rolling before earnings. It usually costs a little and it gives up the fat premium that drew you in. That is the point.

The check that was missing

The trade was fine. The plan had a hole: nobody looked at the calendar. The fix is one line on the checklist, before every sale:

• Open the company's investor page or your broker's calendar. Find the next earnings date.
• If it falls before expiry, decide now: hold through (only on a stock you want to own at the strike, sized for the bad row) or pick an expiry that ends before it.
• Write "earnings: [date], outside expiry" in the journal. If you can't write it, don't sell.

The same check applies to covered calls. There the gap risk is a big jump that leaves you called away far below the new price, plus the same drop risk on the shares. See covered call before earnings.

What to do this week

1. Find the exact date and whether it is before or after the market open.
2. Fill in the table above with your strike and today's put price.
3. Answer the one question: would you buy at the strike after a bad report?
4. Yes: hold, and write the −$550-style number in your journal as the risk you accepted.
5. No: close or roll before the report. Keep the $10 and the lesson.

Check the implied volatility guide if you want to see why the premium was richer than usual, and IV crush explained for what happens to it the morning after.

Questions