Risk Tools · Earnings Season

Earnings Gap Risk Planner: Stress-Test Your Stop Before Earnings

Find out how far an overnight gap can blow past your stop.

Enter your position size, planned stop, and custom adverse gap prices to see the exact dollar loss each scenario produces, and whether it fits your risk budget.

Understand earnings gaps first Go to planner

By Swoopr Editorial Team

Published · Updated

AI-assisted content · Swoopr Investment is responsible for the final published article.

Why Your Stop Doesn't Protect You Through Earnings

A stop order is a powerful intraday tool. But when a company reports earnings after market close, the stock can open the next morning at a dramatically different price, skipping straight past your stop without triggering it at anything close to your intended exit. This is called a gap risk, and it's one of the most common ways traders sustain losses far larger than they planned.

This planner lets you model that scenario concretely. Enter your entry price, direction, share count, and planned stop. Then add one to five custom adverse gap prices, the prices you're afraid the stock might open at, and see exactly what each scenario costs in dollars and as a percentage of your reference capital.

All calculations run locally in your browser. No position details are sent anywhere.

What the planner outputs and how to interpret each value
Output Definition How to read it
Planned stop lossDollar loss if exit occurs exactly at your stop priceYour intended max loss; real gaps often exceed this
Scenario exit priceThe adverse gap price you entered for that rowA hypothetical open price after an adverse earnings reaction
Loss per sharePrice move against the trade plus slippage allowanceIncludes slippage to model real fill friction on the open
Total lossLoss per share × share quantityDollar impact on the account for this scenario
% of capitalTotal loss ÷ reference capital × 100Compares the loss to your risk budget baseline
vs planned stopScenario total loss minus planned stop lossPositive = gap cost more than you planned; negative = within stop
Max shares at budgetFloor(max stress budget ÷ loss per share for that scenario)Largest position that keeps worst-case loss within your budget

Earnings Gap Risk Planner

For education only; not investment advice. Gap scenarios are arbitrary stress inputs, not forecasts. Actual gaps can be worse.

Position Details
Whole shares only.
Your intended exit if the stock moves against you during regular hours. The planner will warn if this is inconsistent with your direction.
Risk Parameters
Your total account size or risk-budget baseline. Used to express losses as a percentage.
Extra friction to model: wide spread on the gap open, partial fill, or market-order impact. Enter 0 to ignore.
If entered, the planner also shows the maximum share count that keeps each scenario's loss within this budget.
Gap Scenarios (Adverse Exit Prices)

Enter the price you fear the stock could open at after an adverse earnings reaction. Add up to 5 scenarios. At least one is required.

Scenario Adverse Exit Price ($) Remove scenario
Scenario 1

Frequently Asked Questions

Why doesn't my stop protect me through earnings?

A stop order becomes a market order (or limit order) when the trigger price is hit. During after-hours trading or before the open, your stop can be triggered at a price far below (for a long) your intended exit because the stock gaps straight through that level. You entered a stop at $43 but the stock opens at $36, your fill is near $36, not $43. The planner shows you this gap numerically.

What should I use as adverse exit prices?

Use prices that reflect realistic negative reactions for the specific stock, not a generic percentage. Gap size after an earnings miss varies widely by company, smaller, more volatile, or thinly-traded names have historically shown larger overnight moves than large, heavily-covered blue chips, but the exact range differs by stock and by how far the report deviated from expectations. Instead of guessing a percentage, pull the stock's own historical post-earnings gap moves (its last 8-12 reports), its options-implied move for the upcoming date, and the analyst consensus downside target, then enter those actual prices as your scenarios. The planner does not suggest prices, you supply the stress inputs.

How is the planned stop loss calculated?

For a long position: planned stop loss = (entry price − stop price) × shares. For a short: (stop price − entry price) × shares. Slippage is not added to the planned stop loss calculation. It is only added to the gap scenario losses, because slippage on a stop triggered intraday is typically much smaller than on a volatile gap open.

What does the "vs planned stop" column mean?

It shows how much more (or less) the gap scenario costs you compared to your planned stop loss. A positive number means the gap blew through your stop and cost you that many additional dollars. A negative number (or zero) would mean the adverse price is actually at or better than your stop, unlikely if you model genuinely adverse scenarios, but possible if you enter a scenario above (long) or below (short) your stop.

What is the max shares at budget figure?

If you enter a maximum stress-loss budget, the planner divides that budget by the loss per share for each scenario to find the largest position size that stays within budget under that scenario. It uses floor division, rounding down to whole shares, so the result is always achievable. Different scenarios give different answers; the most conservative (lowest share count) is your actual safe maximum if all scenarios are equally plausible.

Are my values saved or transmitted?

No. All calculations run locally in your browser. No prices, quantities, or results are transmitted to a server, stored between sessions, or captured in analytics events. Refresh or close the page and all values are cleared.

References

This planner projects outcomes from stress scenarios you enter, it does not predict actual earnings-gap magnitude or direction.