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Interesting thing to stumble upon. Essentially, you are buying WEEKLY verticals, doing that every week ONLY during the first 30 days after earnings. Then, you essentially take the next two months off until earnings hits again, then you start up again the day after earnings, but only for a month again. I think it's important to study the individual trades in the trade log section. Having just purchased a subscription yesterday, it only took me my first simulation to find a couple potential bugs, which greatly affected the results. In this case of TSLA, it's interesting to see the individual trade results, and how each month after earnings did. Here's a quick rundown of some of the 30-day periods, based on 1-lot, 40d-20d verticals: 2/10/16 $1619 (all 5 winning trades) 5/4/16 $-147 (1 winner, 1 scratch, 3 losers) 8/3/16 $-479 (all 5 losing trades) 10/26/16 $-137 (4 losing, 1 winner) And here's where it gets interesting... Next position opened is March 3rd. But earnings was on 2/22. So it entered a trade this time 7 days after earnings, not 1. Looks like potential bug #1, or wrong earnings date data. Then, instead of stopping the weekly trades after a month (~5 trades like in other cycles), it just kept going and going until today, 9 trades later. This would appear to be bug #2. The first 5 trades netted $827 (3 win, 2 losers), and the next 4 trades netted $-30.

This is how they recommend using the 7th day predicted move: Predicted Move (Volatility) - 7th Days Expected volatility on 7th day since Earnings results. Why is it Important? Higher Upside reaction on 7th day If historical price change on 7th day is higher than price change on next day, stock tends to gain more from Earnings result. It supports Buy In Post-Earnings strategy. Lower Upside reaction on 7th day If historical price change on 7th day is less than price change on next day, stock tends to give up from next price gain. It supports Sell In News strategy. Further Downside reaction on 7th day If historical price change on 7th day is less than next day drop, stock tends to drop even more from Earnings result. Less Downside reaction on 7th day If historical price change on 7th day is less than next day drop, stock tends to recover from next price drop. It supports Buy In Dip strategy.

http://stocksearning.com/ (same link I shared with you before) will show where the underlying historically trades 7 days after earnings. There are definitive trends with certain underlying equities. The shorter time frame would require a more aggressive strategy than you use with TSLA, but of course the potential gains are realized much more rapidly.

Don't know, I just use charts for general guidance at a quick glance

I don't see any problem. Calculating returns based on maximum risk (or margin) is the only correct way to do it. Many options gurus abuse the ignorance of the general public to inflate their returns. In the above example, if they get $1 credit on $5 spread and it expires worthless, they present it as 100% gain. In fact, it is 25% gain, not 100%. At wthe same time, if they lose $4 they would present it as 100% loss. Which is correct, just not consistent. I believe the software presents the P/L correctly - the only issue is as discussed with stop losses.

Yes, 100% loss is based on margin, not credit received. This is something that is worth clarification in the software otherwise it could be confusing.

I see our discrepancy. I am in total agreement with the margin calculation, but I think we have always used a max loss of 100% for credit or debit spreads - I would always consider max loss to be 100% and that value for a credit spread is the margin requirement (which is equal to width - credit received). @Kim- please chime in with how you view this calculation. So for your example of selling a $5 width spread for $1. I have always considered the max gain percentage to be the credit received ($1) divided by the margin requirement ($4) = 25%, and the max loss to be 100% if the entire margin requirement of $4 was lost. This terminology difference is good to know, as I think many of the SO members view the gain/loss percentages the same way that I do - which means that the "close trade when" percentage corresponds to a dollar figure which is much lower than what people may think it is.

@Ophir Gottlieb- Thank you for the explanation. So I assume the gain/loss% is based on the "amount risked" ?? However, I did just notice something to the contrary. I used your VXX example a few posts back of selling 40/15 delta call credit spread with a rollover of 7 days and a close trade when losses above 50%. I ran it through the tool and drilled into the trade details, for the most recent "close of losses" occurrence I observed the following: Trade open on 4/7 - sell VXX 17/18.5 call credit spread for 0.19 (so margin is 1.50 width - 0.19 = 1.31). Trade closed due to losses on 4/10 for 0.34, for a loss of 0.15 (0.34 - 0.19). While this 0.34 is close to 2x the opening credit received, it is nowhere close to a 50% loss based on the margin requirement of the credit spread (which would be around a 0.65 loss at a closing price of around 0.84). So, it would appear that "Close Trade When" loss percentage may not be what the user thinks it is when dealing with credit spreads.

@Ophir Gottlieb- I get what you are saying, but the terminology will confuse SO members. When dealing with credit spreads, Kim (correctly IMO) bases his gain/loss percentage on the margin required and not the credit received. For example if you sell a spread of width 10 for 2.00, then your margin requirement is $800 per spread and that is what gains and losses should be based on. For what you are talking about, you mean get out of the credit spread when its value is 2x the credit you received for opening the trade. It's just a terminology thing - but it does bring an important question to mind. When you are using the tool for selling a spread - is the gain/loss percentage calculated by the tool based on the up-front credit received??? Or on the margin requirement (width of spread minus credit received)???