Pre-earnings setup matrix checklist
Turn a messy pre-earnings plan into a matrix so every scenario maps to one action and one stop condition
Direct answer
Earnings windows turn small mistakes into large losses when every variable changes at once. If your setup does not explicitly map assumptions to actions, the trade engine will run before your plan does A pre-earnings matrix keeps the same plan valid when prices, spread, and assignment risk move together
Build one matrix from thesis, contract, and execution variables
Write three columns before opening:
- thesis assumption: when the idea is valid
- contract behavior assumption: what you expect from strike, expiration, and product clock
- execution assumption: what quote, size, and route conditions keep you live
Then define each row as a state.
Example states:
- thesis invalid, liquidity tight
- thesis intact, spread too wide
- thesis intact, spread stable, assignment noise high
Do not mix states. A matrix is only useful if each row has a unique action.
Force stop-loss, hedge, and re-entry decisions into one table
For each cell you must define:
Keep the table minimal but complete:
- keep/open/close decision
- trigger that moves to this state
- immediate action if the trigger repeats
- if this cell appears twice in a row, your next action cannot be “wait and see”
- if the same remedy appears in two different cells, it is probably a shared risk control
Turn the matrix into an execution script
Before first entry, write the order:
- enter the starter order (size and type)
- confirm state
- execute the row action
- log result and next checkpoint
The execution script should include what happens if the expected row is not reached in 15 seconds.
Keep assignment and settlement logic attached to the matrix
One row should always answer:
- what changes if assignment risk appears inside the matrix
- whether settlement timing can force a faster flatten decision
- maximum extra exposure from assignment that is still acceptable
If one row leaves these blank, mark the whole matrix as incomplete.
Validate with a one-minute test
Use one dry run in paper mode 60 seconds before the open:
You should not proceed to live size until all rows execute cleanly at least once in dry conditions.
- confirm the right row with real quotes
- confirm the action path for each of the three states above
- confirm whether state transitions can be logged manually
Common questions
Does this replace a strategy checklist?
No. It complements strategy design by making each execution state actionable under uncertainty.
Can I keep the matrix small?
Yes. Keep fewer rows only if each row has one unambiguous action and one explicit stop.
How often should I rebuild the matrix?
At least once for each distinct earnings date because contract clock and settlement can change risk profile.