Earning's is not just one big event there's three parts pre-earning's, holding through earning's, and post earning's. There's two variables at play during this period, the IV rise and IV crush. Most PnL charts cannot account for this change in IV so playing earning's is something you really only learn from firsthand experience.

There's only 3 option structures will trade for earning's:

• Call & put debt spread to play pre-earning's
• Diagonals to play holding-through earning's
• Calendars/Diagonals to play post-earning's

I spent the longest time trying to use double calendars to create Theta positive position to play pre-earning's, the problem was it only worked sometimes. If IV rose too quickly on some companies, my short legs would overlap my long legs gaining faster, flipping me back to Theta negative position.

My next plan was to widen the dates between the calendars so Theta would burn even slower in long legs, more resilient Theta positive position essentially. This proved to be more effective, the short legs had much harder time overlapping long legs, but it still happened. I was fighting the current, the IV rise too powerful, and an element had not properly utilized in my game plan until now.

The correct way to trade each phase of earning's:

1. Pre-earnings

It's crucial to have room between the price of strikes, if not forced to hold right up until expiration for the difference in dates to matter because of IV rise, if company reports Tuesday you won't benefit from Theta burn because of the IV rise, still too far from Friday, and then IV crush happens game over. However, with the short leg farther OTM it can begin to Theta burn as the likelihood of being ITM by expiration is far less, so it receives less IV rise and more Theta burn possibility, that's good.

So pre-earning's call/put debt spread is king. If purely wanting to play pre-earning's closing before release. CDS allows you to pay the least amount for your long leg because it expires much sooner than a calendar, but the long legs will receive substantial more rise in IV since they expire the week of earning's which would offset their Theta burn too. Then with the short legs being farther OTM, positive Theta burn can actually start to take place much sooner.

Now I can benefit from the rise of IV, my long legs see substantial gain from the IV & price movement since they expire the week of earning's, the short legs will actually Theta burn much sooner because they're far OTM and will receive much less IV rise. Before the IV rise was happening too fast choking out my calendars. However, CDS will benefit from the IV rise and positive Theta decay. It's basically buying a call, benefiting from IV rise, and having a small cost reduction from the far OTM short leg, which is far less relevant than with a calendar which was causing my issues.

2. Holding-Through Earning's

If you're holding through earning's you're facing IV crush which is always nasty. So the best way to utilize holding through earning's is literally on the day of earning's when IV is highest open a diagonal. The premium from short leg will be the highest possible, and buying the long legs 90-120 days the IV crush is almost non-existent. So end up receiving massive premium, then left with calls which barley crushed and had a huge chunk paid for, which can continue to sell against further paying off my long legs as price keeps moving in my intended direction, if right about earning's of course.

For example, am bullish on S, $26/$29 (8/30-12/20) diagonal gives me calls to hold for next 4 months, huge chunk paid off by this massive high IV premium received from short legs, and can keep selling against without worry of being assigned after earning's cause doubt S breaches $29. If you're holding through earning's, it's to open on earning's for highest premium received possible to get a fat down payment on long dated long legs. Aside from that anything closer in date will IV crush it's really nasty.

3. Post-Earning's

If you feel your strikes will be breached often than diagonals are superior, you pay a little more to have the insurance of if strike is breached intrinsic value will be different between strikes keeping me in profit. Calendars are cheaper to open, superior to diagonals if strikes are not breached, but will fail if they run too deep ITM because intrinsic value being equal between strikes will make it much harder to profit. I prefer calendars, my mentor prefers diagonals, matter of preference. I feel my strikes won't be blown out, rather pay less. He rather pay more, ensure if his strikes are blown out he's still profiting well and certainly more than me in that case.

CONCLUSION: These are options structures which react appropriately to the IV rise and IV crush. I'd be hard pressed to find a better options structure than call/put debt spread to open a couple weeks before earning's to close before release, which benefits from positive Theta decay thanks to IV rise in long legs, it shouldn't technically work like that but does in environment of earning's and is the best pre-earning's choice imo.