CarMax reports Q1 FY2027 earnings before the market opens on Tuesday, June 17, which means options traders have roughly 48 hours left in the setup window. The stock has been under pressure from high interest rates squeezing auto loan affordability, used car prices normalizing from pandemic-era highs, and consumers pulling back on big-ticket discretionary purchases. That combination has kept KMX IV elevated relative to history, and the options market is now pricing one of the larger expected moves in the used car retail space.
- KMX reports Q1 FY2027 on June 17, 2026 before market open: this is a pre-market print, not after hours.
- The historical expected move for KMX over recent quarters has averaged approximately 9.28%, one of the larger moves in the consumer discretionary space.
- With a BMO report, the post-earnings reaction will be priced into the June 17 open: 0DTE and weekly options carry elevated gamma risk throughout that session.
- Auto retail earnings are sensitive to gross profit per unit (GPU) and financing spread, two metrics that have been compressing as used car prices normalize and rates stay elevated.
- This article covers the expected move setup, IV rank context, and strategy frameworks. It does not provide a price target or directional recommendation.
Why CarMax Earnings Move the Stock More Than You’d Expect
CarMax is the largest used vehicle retailer in the US with roughly 240 stores, and it sits at the intersection of three macro currents that are all in flux right now: used car prices, consumer credit conditions, and auto loan rates. Each one affects KMX’s margins differently, and each one is uncertain going into the June 17 print.
The ~9.28% historical average expected move is large for a retailer. By comparison, a company like Target (TGT) or Walmart (WMT) typically prices in a 4-6% expected move. KMX’s larger move history reflects the earnings volatility that comes from forecasting GPU compression and total unit volume simultaneously, the combination makes quarterly variance high relative to revenue scale.
The three numbers that matter most for the Q1 print:
- Gross profit per unit (GPU): This metric captures how much margin CarMax earns on each vehicle sold. In recent quarters it has been compressing as wholesale used car prices stabilize and competition increases. A GPU miss tends to hit the stock harder than a volume miss.
- Retail unit sales volume: Consumer appetite for discretionary big-ticket purchases remains uncertain. Higher financing costs have reduced the pool of qualified buyers for used vehicles in the $25,000 to $40,000 range.
- CarMax Auto Finance (CAF) income: KMX’s in-house financing arm is a significant profit contributor. Spreads between lending rates and cost of funds have been squeezed in a higher-rate environment. This is the swing factor most analysts focus on.
Reading the Pre-Earnings Options Setup
The Expected Move Calculation
The options market’s expected move into any binary event can be estimated by taking the at-the-money (ATM) straddle price for the closest expiration after the event and dividing by the stock price. For KMX on June 17, the June 20 weekly expiration is the most relevant series.
Historical data puts the average straddle-implied expected move for KMX around 9.28%. On the day you’re reading this, verify the live straddle price on Barchart or your broker’s options chain before sizing any position, IV can shift meaningfully in the 24 to 48 hours before a BMO print as the morning approaches.
To check it yourself: pull up the June 20 options chain on KMX, find the ATM strike closest to the current stock price, and add the call ask price plus the put ask price. Divide that sum by the stock price. That percentage is roughly what the market is implying as the one-standard-deviation move.
IV Rank Context
IV rank compares current implied volatility to the stock’s 52-week IV range. A high IV rank (above 50) means options are expensive relative to the past year, premium sellers are structurally advantaged. A low IV rank (below 30) means the opposite.
For pre-earnings setups, IV rank almost always rises as the event approaches. Verify the current IV rank on Barchart’s KMX options page before entering any position. If IV rank is above 50, credit strategies (iron condors, short strangles) collect more premium for equivalent risk. If IV rank has already compressed below 30 ahead of earnings, the math for credit strategies weakens considerably.
Strategy Frameworks for This Setup
Three broad approaches apply to a BMO earnings event with a large historical expected move. None of them is a trade recommendation: this is a framework for thinking through the risk/reward mechanics based on your own thesis.
1. Neutral: Short Strangle or Iron Condor Outside the Expected Move
If you believe the 9% expected move overstates the likely reaction, because the macro setup has already been digested by the market or because KMX’s results are unlikely to produce a surprise of that magnitude, the classic approach is to sell a strangle (or iron condor for defined risk) with short strikes positioned beyond the implied move.
The logic: the options market’s implied move has historically overstated KMX’s actual earnings move in several quarters. When that pattern holds, premium sellers collect the excess IV as profit.
The risk: KMX is not a slow-moving retailer. If GPU collapses or CAF income misses materially, the stock can gap beyond the expected range. An iron condor with defined risk on both sides caps the maximum loss; a short strangle does not.
For defined risk, tastytrade allows multi-leg entry on an iron condor as a single order at a mid-price, which simplifies execution on a busy pre-earnings day. Open a tastytrade account for full options strategy access including pre-configured multi-leg spread orders.
2. Directional: Long Call or Long Put Based on a Catalyst View
Some traders enter KMX earnings with a directional thesis based on the GPU or CAF narrative. A long call profits if KMX beats and the stock rallies beyond the cost of the option. A long put profits from a significant miss.
The challenge with directional options into a BMO print is timing. By the time you place the order the afternoon before June 17, implied volatility is already elevated. The IV crush that happens after the report reduces option value even on a correct directional call, unless the move exceeds the expected range significantly.
Long options into earnings work best when IV rank is below 30 (options are cheap) and the expected move has been historically underpriced. Confirm both conditions before entering a directional position.
3. Post-Earnings: Trading After the IV Crush
After the June 17 BMO print, implied volatility on KMX typically collapses rapidly: this is IV crush. Options that were expensive before the number are cheap immediately after. The post-earnings session on June 17 itself carries high gamma risk from the gap open, but traders who understand IV crush sometimes establish new short premium positions in the days following the print when IV has compressed but weekly options still have time decay remaining.
This is a post-event approach, not a pre-earnings setup. It requires watching the June 17 open carefully before entering.
Broker Access for KMX Options
| Broker | Options Fee | Multi-Leg Orders | Verified |
|---|---|---|---|
| tastytrade | $1.00/contract open, $0 to close | Yes: single iron condor entry | 2026-03-28 |
| Interactive Brokers (IBKR Lite) | $0.65/contract | Yes: combination orders | 2026-03-31 |
| Schwab / thinkorswim | $0.65/contract | Yes: full multi-leg support | 2026-04-21 |
| Webull | $0/contract | Limited spread support | 2026-03-28 |
| Robinhood | $0/contract | 3 PM ET cutoff on 0DTE single-stock options | 2026-03-28 |
Commission data sourced from verified broker data (last checked dates shown above). Always check current terms at the broker’s site before trading, rates can change.
For earnings plays involving iron condors or strangles, tastytrade and IBKR provide the strongest multi-leg execution. Open an IBKR account for access to combination orders that execute all legs simultaneously at a single net credit.
What This Setup Is NOT For
This is not an article for traders who are new to options and want a simple earnings play. KMX earnings with a 9% expected move and a BMO report is a high-gamma event that requires active management. Start with paper trading on a platform like tastytrade or thinkorswim before trading real capital around binary events.
This article also does not provide a stock pick or a directional call on KMX. The expected move setup is strategy-agnostic, the market may underprice or overprice the move on any given quarter. Sizing large positions on a single binary event is a significant risk management problem regardless of the thesis.
Position sizing note: most experienced options traders cap exposure to any single earnings event at 1 to 2% of total account value. BMO prints can gap well beyond the expected range on rare occasions, and the asymmetry of loss between an iron condor and a naked short strangle becomes very real in those scenarios.
Bottom Line
CarMax Q1 FY2027 prints before the open on June 17 with a historically large expected move near 9.28%, making it one of the richer premium setups in consumer discretionary this week. The key metrics to watch are gross profit per unit and CarMax Auto Finance income, both of which have been under compression. Verify the live straddle price and IV rank on June 16 before entering any position, and confirm your broker’s multi-leg order capabilities if you’re trading a spread strategy.
FAQ
When does CarMax report Q1 FY2027 earnings?
CarMax is scheduled to report Q1 FY2027 results before the market opens on Tuesday, June 17, 2026. The stock will open with any gap on that morning and then trade throughout the regular session.
What is the expected move for KMX earnings in June 2026?
Based on historical ATM straddle pricing, KMX has averaged approximately a 9.28% expected move around earnings over recent quarters. The live implied move for the June 20 expiration should be verified on Barchart or your broker’s options chain closer to the report date, as IV shifts in the 24 to 48 hours before the print.
What options strategy works best for CarMax earnings?
There is no single best strategy, the right approach depends on your market view, risk tolerance, and experience level. A neutral view with a defined-risk iron condor outside the expected move, a directional long option if IV rank is low, or a post-earnings IV crush setup are three frameworks traders use. None of these is a recommendation; all carry meaningful risk around binary events.
Why does CarMax have such a large expected move for a retailer?
KMX’s earnings variability comes from the combination of gross profit per unit, total unit sales volume, and CarMax Auto Finance income, three metrics that are each sensitive to different macro factors (used car prices, consumer demand, and interest rates). The quarterly variance across those inputs is higher than most traditional retailers, which drives the larger expected move.
Which brokers are best for trading KMX options around earnings?
For multi-leg strategies like iron condors, tastytrade and Interactive Brokers offer the strongest execution capabilities, including single-click multi-leg entry at net credit prices. Schwab’s thinkorswim is also capable. Robinhood’s 3 PM cutoff on single-stock 0DTE options applies if you’re trading June 17 expiration positions on the day of the report, use a more capable platform if you need intraday management flexibility.