Can Risk Of Earnings Trades Signal ‘Planned Profits?’


Simpler Trading Team

Apr 16th 2020  .  3 min read

What if you could break the “rules” and take a trade that has the potential for “lotto” profits?

Traders – new and seasoned – marvel at possible gains from massive price swings triggered by earnings announcements. The volatility of earnings season adds an element of risk, but there are ways to learn how to profit from the sudden moves triggered by a company earnings call.

These “lotto” style trades can go against a trader’s “rules” for trade management to avoid risk.

But in trading, risk can lead to reward.

Earnings trades – if managed correctly – offer the possibility of “planned profit” opportunities.

Earnings season and company earnings reports follow a schedule throughout the year. Traders can discover practical methods to take advantage of earnings events.

There are no official dates for quarterly filings, so earnings periods can be an almost daily roll out of earnings statements from a variety of companies.

Companies relay quarterly filings through a combination of press releases, SEC filings, and earnings calls which may have comments and discussions with company management. There is no standard filing format other than the mandatory SEC report.

Investors wanting to stay on top of the earnings call calendar can consider Simpler Edge. Edge provides access to data used by institutional investors in real-time. Edge members have immediate access to notable earnings reports and updates that other retail investors may not see for weeks.

Simpler Trading also has a chart indicator to view earnings-specific information onscreen for traders using popular trading software.

Earnings filings are not crystal balls when it comes to trading. There is simply no way to tell the future with company financial forecasts or estimates.

Seasoned traders will develop specific tools and resources that can deliver an edge on which earnings reports to watch, stock market earnings, and upcoming company results. An earnings trade has a limited window around any specific company. Experienced traders will have carefully structured trading plans in place to profit during that window.

Earnings trades can be the deep end of the swimming pool for traders. You don’t want to jump in unless you’re prepared.

Despite all the accounts of success and horror stories about losses, it is possible to structure a strategy that takes advantage of earnings trades.

Every trader must figure out what works for them when earnings trades present themselves. It’s a wise choice to get help and guidance from experts along the way.

Get connected to discover potential trading opportunities with the next round of earnings.

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