Welcome to PM Academy
Module 20 · Equities · ~16 min
Earnings season playbook.
By the end of this module, you’ll have a repeatable playbook for the four times a year every public stock prints earnings, the moments when prediction markets misprice volatility most reliably.
Earnings reports create the highest-edge prediction-market opportunities. Analyst estimates, whisper numbers, and post-print repricing, learn the playbook.
How do you trade earnings season on prediction markets?
Trade each report as a binary, “Will X beat EPS estimates?”, and hunt the gaps between analyst consensus, the whisper number, and the prediction-market price. S&P 500 companies beat published estimates roughly 75% of the time, and the market knows it, so the edge isn’t predicting beats; it’s finding markets still priced below that baseline or names whose beat rate diverges from the cross-sector average. The whisper number, what smart money actually expects, usually runs above published consensus because analysts sandbag estimates to preserve management relationships ($1.50 published versus $1.58 whispered in the module’s example). Be positioned before the print: the module’s timeline shows a PM jumping from $0.72 at the 4:00 close to $0.94 one minute after release and settling at $1.00 by 4:15. Cap every earnings event at 5% of bankroll, because the ~25% miss rate is real.
Section 01
Why earnings = maximum edge.
Earnings season is the Super Bowl of prediction markets. Every quarter, thousands of publicly traded companies release their financial results, and each report is a high-stakes binary event. Did the company beat analyst expectations, or didn’t it? That clean binary structure maps perfectly to PMs, and creates opportunities you won’t find anywhere else.
Concentrated information
All the edge is concentrated into a single moment. The earnings print either beats, misses, or matches. Clean binary outcome.
Clear reference points
Analyst consensus gives you a public benchmark. When you disagree with consensus, and you’re right, PMs pay you handsomely.
Historical patterns
S&P 500 companies beat estimates ~75% of the time. That baseline alone tells you “Will X beat estimates?” PMs should trade above 50¢.
Key insight
The market knows the beat rate is ~75%. The real edge isn’t in predicting beats, it’s in finding the companies where the market is still pricing below 75%, or where the historical beat rate diverges from the cross-sector average.
Section 02
Pre-earnings, the setup.
Before every earnings report, Wall Street publishes a consensus estimate, the average of all analyst predictions for EPS and revenue. This consensus becomes the benchmark that prediction markets price around.
If consensus says Apple earns $1.50/share and 30 of 40 analysts expect a beat, the “Will Apple beat EPS?” PM should trade around $0.75. But markets aren’t always efficient, that’s where your edge lives.
Use the calculator to quantify edge before sizing a position. If the PM diverges from your estimate by more than 5 points, you may have a tradeable opportunity.
Earnings edge calculator
Three sliders, three checks: consensus, market price, your view.
Section 03
The whisper number.
The whisper number is what smart money actually expects, often different from published analyst consensus. Analysts frequently “sandbag” their estimates, publishing numbers they know the company will beat to maintain relationships with management. The whisper number strips away that bias.
Understanding the gap between the published estimate, the whisper number, and what the PM is pricing is the key to finding mispriced earnings contracts.
Published estimate
What analysts publish, can be sandbagged to preserve relationships. Often deliberately conservative.
Whisper number
What the market actually expects, usually higher than published. Reflects real institutional expectations.
PM implied
What the prediction market is pricing, reflects crowd expectations and available liquidity.
Key insight
When the PM price diverges significantly from the whisper number, you’ve found potential edge. The crowd trades on published estimates; smart money trades on whispers.
Whisper number simulator
Click a scenario to see what happens to the PM price and stock after the print.
Beat published + beat whisper
Best case
Beat published + miss whisper
Tricky scenario
Miss published
Worst case
Select a scenario above to see the outcome.
Section 04
Post-earnings, the speed game.
Once earnings are released, prediction markets reprice in seconds. The print drops, traders rush to buy or sell, and within minutes the PM converges on the correct settlement value. Understanding this timeline is critical for anyone considering post-print trading.
Repricing timeline
Market closes. PM sitting at $0.72, pricing 72% chance of a beat.
Earnings released, beat by 5%. PM begins rapid repricing.
PM jumps to $0.94, fast traders already bought, but uncertainty remains around guidance.
Conference call confirms strong forward guidance, PM at $0.97.
Settlement, PM closes at $1.00. YES holders collect.
The reversion trap
The initial after-hours move isn’t always the final move. A company can beat earnings but guide down, causing the stock to reverse. If you’re trading post-print, wait for the full picture before committing capital.
Strategy
Most retail PM traders should be positioned before the earnings print. Trying to trade the seconds after release requires institutional-grade data feeds and execution speed. Your edge is in the research you do beforehand, not in reaction time.
Earnings season: what people ask
Each answer also ships invisibly as schema.org FAQ data for search engines and AI assistants. Tap a question to expand.
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What is the whisper number?
The earnings figure smart money actually expects, as opposed to the published analyst consensus. Analysts frequently sandbag, publishing numbers they know the company will beat to maintain relationships with management, so the whisper usually runs higher: $1.50 published versus $1.58 whispered in the module’s example. The crowd trades on published estimates; smart money trades on whispers, and a PM price that diverges from the whisper is where edge lives. -
Can a stock fall even when the company beats earnings?
Yes, that’s the tricky middle scenario: beat the published estimate but miss the whisper. The “Will X beat EPS?” market still settles YES at $1.00, so your PM trade wins, but the stock can drop because real institutional expectations were higher than the headline number. It’s why you should never trade the stock itself on beat/miss headlines alone. -
How often do companies beat earnings estimates?
About 75% of the time for S&P 500 companies, which means a “Will X beat estimates?” market should generally trade above 50¢. The market knows that baseline, so edge comes from names priced well below 75% or with beat rates that diverge from the average. The other ~25%, the misses, settle at $0.00 and can knock the stock down 5–15% or more, which is why sizing caps exist. -
Should you trade before or after an earnings report?
Before. Once the print drops, PMs reprice in seconds: $0.72 at the 4:00 close, $0.94 by 4:02, $0.97 after guidance confirmed, settled at $1.00 by 4:15 in the module’s timeline. Trading those seconds requires institutional-grade data feeds and execution speed. And mind the reversion trap: a company can beat earnings but guide down, reversing the after-hours move, so post-print traders should wait for the full picture. -
How do you prepare for earnings week?
Six steps from the module’s checklist: identify companies reporting this week (Earnings Whispers, Yahoo Finance earnings calendar), pull analyst consensus for EPS and revenue, compare PM pricing to the ~75% historical beat rate, size positions with the Kelly criterion, cap exposure at 5% of bankroll per event, and review results after settlement, tracking predictions against outcomes in a spreadsheet so your accuracy improves over time.
Section 05
Building your earnings calendar.
Consistent earnings trading requires a systematic approach. Before each earnings season, work through this preparation checklist to identify opportunities and manage risk. The Continue button unlocks at 6/6.
Identify companies reporting this week.
Sources: Earnings Whispers, Yahoo Finance earnings calendar.
Check analyst consensus estimates for each.
Focus on EPS and revenue consensus from major financial sites.
Compare PM pricing to consensus beat probability.
Look for PMs pricing significantly above or below the ~75% historical beat rate.
Size positions using Kelly criterion.
Covered in Module 03, never oversize on a single earnings event.
Set max exposure per earnings event (never more than 5% of bankroll).
Even high-confidence plays should be capped, earnings can surprise.
Review results after settlement, track your accuracy.
Build a spreadsheet of predictions vs outcomes to improve over time.
Module 20 complete
Earnings mapped.
Earnings season is now a calendar of trades. You know where the consensus number is, where the whisper number is, and how to position around the gap, the same playbook that makes earnings season a feature of every options-desk year.
Concretely, you’ve mastered pre-earnings edge, the whisper number, the post-print timeline, and the prep process that makes earnings trading repeatable. Three things you walk away with:
The ability to read an earnings-week PM against analyst consensus and the whisper number, and take the side the crowd is underpricing.
A post-print timeline, the first 5–30 minutes after the report, where binary repricing is fastest and the fade trades set up.
A repeatable earnings prep checklist: consensus, whisper, sector read, guidance history, so every quarter is a structured trade, not a headline reaction.
Next up: your first equities trade, setup, entry, intraday management, and review on a live SPY market.
Complete the checklist above to unlock