# NewsEdge Trading Catalysts

> Five strategies to trade news catalysts with NewsEdge. Each uses impact levels and news type presets to find setups before the crowd.

Source: https://tradeecho.com/docs/features/newsedge/trading-catalysts (updated 2026-03-15)

Five strategies to trade news catalysts with NewsEdge. Each uses impact levels and news type presets to find setups before the crowd.

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## 1. Earnings Plays

### Strategy

Trade earnings beats, misses, and neutral reactions. Use the Earnings Focus preset and High impact filter.

### Approaches

| Approach | Setup | Action |
|----------|-------|--------|
| **Beat** | Beat + raise = bullish | Buy calls or stock |
| **Miss** | Miss + cut = bearish | Buy puts |
| **Neutral** | In-line + hold = range | Sell premium (iron condor, strangle) |

### Execution

- **Pre-earnings**: Set NewsEdge to Earnings Focus, watch for your ticker
- **Post-release**: Alert hits - check beat/miss/miss magnitude
- **Entry**: Within 5-10 minutes of release. Options often move 30-50% on 5% stock move
- **Exit**: Same day for day trades; 1-3 days for swing

### Risk

- Gaps can reverse. Use stops.
- IV crush after earnings. Sell premium, don't buy long-dated premium into earnings.

---

## 2. FDA Approval Plays

### Strategy

Trade FDA approvals (buy calls) and rejections (buy puts). Stock moves 20-50% on binary events.

### Setup

- **Approval**: Buy calls. Stock gaps up 20-50%
- **Rejection**: Buy puts. Stock gaps down 20-50%

### Execution

- **Pre-FDA**: Use Biotech Catalyst preset, filter by ticker
- **Alert**: Approval or rejection hits
- **Entry**: Within 30 seconds if possible. Move is fast
- **Target**: 30-50% on options. Exit same day or next day

### Risk

- Binary outcomes. Wrong direction = large loss.
- Size small. One trade = 1-2% of account.

---

## 3. Analyst Upgrade Plays

### Strategy

Trade the direction of analyst upgrades and downgrades. Typical 2-5% stock moves.

### Setup

- **Upgrade**: Buy calls or stock
- **Downgrade**: Buy puts or short

### Execution

- **Filter**: Analyst Activity preset, Medium impact
- **Alert**: Upgrade or downgrade on watchlist ticker
- **Confirm**: Check OptionFlow or Snapshot for flow confirmation
- **Entry**: Within 1-2 hours. Move can extend over days
- **Target**: 2-5% stock moves.

### Risk

- Single analyst = noise. Multiple upgrades = stronger signal.
- Downgrades can be sharp. Use stops.

---

## 4. Corporate Action Arbitrage

### Strategy

Trade M&A, stock splits, dividends. Event-driven, often predictable.

### Setup

- **M&A**: Acquirer often dips; target often pops. Trade spreads or single leg
- **Splits**: Pre-split run-up common. Post-split often consolidates
- **Dividends**: Ex-div date plays, dividend capture

### Execution

- **Filter**: Corporate Actions preset

| Event | Typical Move | Action |
|-------|--------------|--------|
| M&A announced | Target +20-50% | Buy target calls |
| M&A deal break | Target -20%+ | Buy target puts |
| Split announced | +5-15% run-up | Buy calls pre-split |

### Risk

- Arbitrage is crowded. Edge is in speed and timing.
- Deal break risk on M&A. Size accordingly.

---

## 5. Market-Moving News Scalping

### Strategy

Act within 30 seconds of High-impact news. Tight stops, 30-50% target, exit within hours.

### Setup

- **Filter**: Market Moving or High impact only
- **Real-time**: Enable 20-second refresh
- **Stops**: 20-30% below entry
- **Target**: 30-50% on options

### Execution

1. NewsEdge alert - High impact
2. Confirm direction (beat = up, miss = down, etc.)
3. Check chart - not already extended
4. Enter within 30 seconds
5. Set stop at 20-30% below entry
6. Target 30-50% or exit within 2-4 hours

### Risk

- Speed is critical. Delayed entry = reduced edge.
- Slippage on fast moves. Use limit orders.
- One bad trade can wipe a day. Strict position sizing.

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## Quick Reference

| Strategy | Preset | Impact | Timeframe |
|----------|--------|--------|-----------|
| Earnings | Earnings Focus | High | Same day |
| FDA | Biotech Catalyst | High | Same day |
| Analyst | Analyst Activity | Medium | 1-3 days |
| Corporate | Corporate Actions | High/Medium | Days to weeks |
| Scalping | Market Moving | High | Hours |

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## Next Steps

- [Quick Start](https://tradeecho.com/docs/features/newsedge/quick-start) - Get started with NewsEdge
- [Impact Levels](https://tradeecho.com/docs/features/newsedge/impact-levels) - Deep dive on High, Medium, Low