Earning Report Play

Public companies listed in U.S. major exchanges such as Nasdaq requires companies to provide earning details and future guidance every quarter. Some individual stocks sometimes have a gradual price movement either up or down a few weeks or days before the earning being released. After earnings being released, often the stock will come with a sharp price change in either direction. This post-earning price movement provides a great range and hence great day trading and swing trading opportunities. However, even though it sounds a straightforward task, numerous challenges are lying ahead of traders for these earning report plays:

 

1. Among so many stocks, how to find stocks that have enough ranges to trade and generate profits? 

2. What kind of trading strategy should we use? Stocks, options, warrants? What kind of options strategies?

3. How do we find stocks that will either surge or tank before earnings? How can we accurately predict earning outcomes so we can position ourselves for maxim profits?

4. How do we read an earning report and its after-release price action? 

Here Moneypig Trading provides two types of earning report play strategies:

1. Pre-earning Report Play

2. Post-earning Report Play

Pre-earning Report Play

Moneypig Trading provides state-of-art machine learning models and advanced data analytics to predict earning outcomes. If an extremely good or bad earning outcome is spotted, Moneypig Trading will send out an alert for members to position them early enough. This type of pre-earning report play is often a swing trading.

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Risks: 

1. the prediction could be inaccurate

2. Even though the forecast is exceptionally accurate, the guidance provided by the company and/or the price action is just not in our favor (e.g. $TWLO example)

Post-earning Play

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After the earning outcomes and company guidance are released, the stock will typically have a clear price action, and this will provide another excellent trading opportunity. Even though post-earning play will have minimal to zero early-bird advantages, it is also less risky due to the uncertainty eliminated upon an earnings release. Therefore, in the following performance disclosure, you will notice that the post-earning play has significantly higher winning rates over the pre-earning plays. This type of post-earning report play could be either a day trading or swing trading. 

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Performance

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