Dual Edge Research publishes two powerful newsletters that work great individually — and even better together. The Bull Strangle Newsletter focuses on stocks and options, combining stock ownership with premium-selling strategies to generate consistent income and market-beating returns. The Smart Spreads Newsletter specializes in seasonal commodity futures spreads, offering a diversified approach with low correlation to equities. Together, they deliver a complete investment perspective — one focused on income, the other on diversification — all under one simple subscription.
Introduction
One of the defining strengths of the Bull Strangle framework is its consistency. Trades are entered on a structured schedule, held over a defined cycle, and designed to generate income over time rather than through prediction. That consistency depends on keeping the environment as stable and repeatable as possible.
Earnings announcements disrupt that environment. They introduce a type of volatility that is fundamentally different from the gradual, time-driven behavior on which options income strategies rely. For that reason, we make a deliberate effort to avoid holding positions through earnings whenever possible. But that discipline creates a second, less obvious challenge—one that becomes especially visible during earnings season. How do you maintain diversification when large portions of the market are temporarily off-limits?
Why Earnings Change the Equation
Earnings are not simply another data point. They are discrete events that can instantly and without warning reprice a stock. Even well-behaved stocks can gap significantly in either direction, often overwhelming the premium collected from option selling.
This is not the type of risk the Bull Strangle strategy is designed to absorb. The framework is built around controlled variability, where time decay works steadily in the background. Earnings replace that with binary outcomes. Avoiding earnings, therefore, is not a tactical preference. It is a structural requirement.
The Sector Concentration Problem
The complication is not just the existence of earnings—it is how they are distributed. Earnings announcements tend to cluster within sectors. Technology companies report within a narrow window. Financials follow a similar pattern. Consumer and industrial names each have their own concentrated reporting periods. The effect is predictable. During certain weeks, entire sectors effectively go offline for trade selection purposes.
This creates a real constraint. A well-balanced watchlist can quickly shrink, not because opportunities are poor, but because they are temporarily untradable. High-quality setups must be passed over simply due to timing. Left unchecked, this can lead to unintended concentration in the remaining sectors that are not reporting. The discipline of avoiding earnings is correct—but it narrows the opportunity set, a problem that must be addressed.
Why Diversification Still Matters
Within the Bull Strangle framework, diversification is not optional. The strategy is built on multiple independent positions spread across sectors, with entries staggered through the 4-week ladder. This structure reduces reliance on any single outcome and allows the portfolio to behave more predictably over time.
When sector availability contracts, that balance can erode. Even if each trade meets all criteria, the portfolio itself can become skewed. Risk begins to concentrate—not because of poor selection, but because of limited options. Maintaining diversification, even during constrained periods, is essential to preserving the integrity of the strategy.
ETFs as a Structural Extension
This is where ETFs play a critical role. Rather than viewing them as secondary alternatives, they function as a structural extension of the opportunity set. ETFs provide broad exposure across sectors or themes without the disruption of individual earnings events. They allow the portfolio to maintain exposure where single-stock opportunities are temporarily unavailable.
When technology stocks are in the middle of earnings, a sector ETF can preserve that allocation. When financials are reporting, an ETF can fill the gap without introducing event risk. In periods when multiple sectors are constrained, broad-market ETFs can help stabilize overall exposure.
In this way, ETFs do not replace stocks—they complement them. They allow the portfolio to remain balanced while still adhering to the core discipline of avoiding earnings.
Current Application
This dynamic is clearly visible in the current environment. We are in the middle of earnings season, where multiple sectors are reporting within overlapping windows. As expected, the pool of eligible individual stocks has narrowed, and sector gaps have become more pronounced.
To maintain proper balance across the 4-week ladder, ETFs have been used deliberately to fill those gaps. At present, ETFs occupy 4 of the 15 active cycle slots. This is not incidental. It reflects the role ETFs are designed to play within the framework—supporting diversification when the stock universe is temporarily constrained. Without them, the portfolio would either become overly concentrated or operate below its intended capacity.
Closing Thought
No single trade drives the long-term effectiveness of the Bull Strangle strategy. The portfolio's consistency over time drives it. Avoiding earnings protects the integrity of individual positions. Using ETFs protects the integrity of the portfolio. Both are essential—and during earnings season, they work together.
More Information
Now you can get two powerful newsletters — for one simple price!
- For stocks and options, the Bull Strangle Newsletter shows you how to combine stock ownership with dual option selling — a disciplined strategy that has consistently outperformed the S&P 500.
- For commodity futures, the Smart Spreads Newsletter focuses on seasonal commodity spreads — a proven, low-correlation approach that thrives in all types of markets.
Each newsletter is designed to deliver consistent income on its own — but when used together, they create a complete, diversified trading approach that works in any market environment.
Visit BullStrangle.com to subscribe for just $1 for the first month.
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Darren Carlat
Dual Edge Research
(214) 636-3133
DualEdgeResearch@gamil.com
Disclaimer
This information is for informational purposes only and should not be considered as investment advice. Past performance is not indicative of future results, and all investments carry inherent risk. Consult with a financial advisor before making any investment decisions.
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