EARNINGS EXPECTATIONS:  

     THIS QTR:   EPS:       .29/share     REV:  1,490/M
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     LAST QTR:  EPS:        .29/share     ACTUAL:  .39/share  (BEAT)
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     NEXT QTR:  EPS:       .37/share     REV:  1,500/M
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     FULL YR:     EPS:        1.55/Share     REV: 6,170/M
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*These are the base metrics we will be watching against the actual release numbers
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BEAT/MISS RECORD:  65% OF THE TIME THEY BEAT ESTIMATES

PRIOR ‘JUMP ZONE’ MOVES (LAST 3 QTRS %) 10.89, -12.94, 19.84

EXPECTED JUMP MOVE:  12-15%

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*** With market volatility at extremes during the coronavirus pandemic there is greater risk in trading these events which may not react as they would under normal market conditions. Please take extra caution before trading. 

Links To Latest News and Headlines

StockJumpers analysis and trade plans are uploaded generally 1 HOUR BEFORE MARKETS CLOSE (3PM EST) for most events.

Trading an earnings catalyst events can be very rewarding (5-20% returns in a matter of minutes or hours) but it is also very risky. Timing plays a key role in whether a trade is profitable or not. Here is our general guideline for how we trade these events in-house.

ENTRY: The system for entry is simple and mechanical. We enter our position at or near market close based on the Trajectory Analysis study (SEE TRADE PLAN TAB) completed a few hours prior. For stock trades it’s a simple BUY or SELL order based on a preset trade allocation amount. Options trades cannot be traded after-hours.

After the earnings release occurs in the aftermarket, we review the financial data and see how it compares to our models. Was it a beat or a miss on expectations? What does the forward guidance look like? Are there other important supplemental metrics reported? (such as subscribers, or same-store sales etc). Often the stock price can swing wildly if the release metrics are mixed or there is no clear cut bull or bear bias. We decide if we stay in and ride it, or get out in the aftermarket.

EXIT:  In the majority of cases where the direction call was correct (short or long) the best time to take profit is the following day about an hour after market open. If the direction call was wrong, or the release data is mixed, we find it best to get out of the trade quickly in the aftermarket, cutting losses or taking a small profit if possible. If the actual release numbers meets or exceeds or models, we stay in and ride the profits (short or long). Exiting a trade is more art than science, based on experience trading that particular stock, general market conditions and the momentum of the market reaction to the release news.

PROFIT/LOSS: Knowing when to take profit or a loss on a trade is an individual decision based on experience and the risk/reward appetite of a trader. This is why traders can lose money on the same event that another trader profited from. None of this is easy and the risk is high. The more experience trading volatile catalyst events the easier it becomes to make good trading decisions. Before you decide to trade this event you should ready all the risks associated with this type of trading. (see risk disclosures here)