Navigating Earnings Seasons with ETFs
Understanding the Impact of Earnings Seasons
Recent ETF investing news has highlighted the growing trend of traders using leveraged and inverse ETFs to make big bets on market moves, particularly during earnings seasons. You're likely wondering what this means for your portfolio. Essentially, earnings seasons can bring significant volatility, and ETFs like SPY and QQQ can provide a way to capitalize on these market fluctuations.
Traders are increasingly using these funds to amplify daily returns, allowing for short-term market views. Popular ETFs include SPY and SH for day trading, with many investors also turning to QQQ for its exposure to the tech sector, including giants like AAPL.
The Setup: Leveraged and Inverse ETFs
Beyond the standard ETFs, there's a growing segment of the ETF business that caters to investors who want to make short-term outsized bets on the stock market. These are leveraged and inverse ETFs, which can provide a way to profit from market declines or amplifying gains during rallies. According to Jillian DelSignore, there's been a major shift into income and fixed income ETFs, with many investors seeking to balance their portfolios.
New data finds retail investors have been diving deeper into increasingly complex ETF products, to gain a trading advantage amid market uncertainty. This trend is reflected in the growing popularity of ETFs like SPY, which has a 50-day moving average at $585, providing key support for traders looking to buy the dip.
The Play: Trading Strategies for Earnings Seasons
So, what can you do to navigate earnings seasons with ETFs? One strategy is to allocate 2% of your portfolio to a leveraged ETF like SPY, with a stop-loss at 5% below your entry price. This limits your max loss to $500 on a $25,000 account, while still allowing you to profit from potential market rallies. Meanwhile, you can also consider setting an alert at $570 for SPY, to buy the dip if the price falls below this level.
Another approach is to use inverse ETFs to hedge your portfolio against potential market declines. For example, you can allocate 1% of your portfolio to an inverse ETF like SH, to profit from a decline in the market. On the flip side, you can also use ETFs like QQQ to profit from a rally in the tech sector, with AAPL being a key driver of this trend.
Your Action Step: Building a Trading Plan
Now that you've got a better understanding of how to navigate earnings seasons with ETFs, it's time to build a trading plan. Start by allocating 5% of your portfolio to a mix of ETFs, including SPY, QQQ, and SH. Set a stop-loss at 10% below your entry price, and consider setting alerts at key support and resistance levels, such as $585 for SPY or $340 for QQQ.
On the other hand, you can also consider using a position sizing strategy, where you allocate a fixed percentage of your portfolio to each trade. For example, you can allocate 2% to a long position in SPY, and 1% to a hedging position in SH. By doing so, you can limit your risk while still allowing yourself to profit from potential market fluctuations.
Last updated: May 2026
By the Investing Strategies Editorial Team
This content is for informational purposes only. Not financial advice—always do your own analysis before making investment decisions.