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Ride-the-Wave Strategy – Best for Stock Traders

Ride-the-Wave targets multi-day price momentum following a company’s earnings announcement (EA). With this strategy:

  1. Buy a stock one day post-EA if a stock reacts positively post-earnings:
    1. Near the close of trading the EA-day for a pre-market-EA
    2. Near the close of the following day for a post-market-EA
  2. Sell-to-close after 7-10 days, or possibly earlier if a desired price target is reached

Similarly,

  1. short a stock one day post-EA if a stock reacts negatively post-earnings:
    1. near the close of trading the EA-day for a premarket-EA
    2. near the close of the following day for a post-market-EA
  2. then buy-to-close after 7-10 days, or possibly earlier if a desired price target is reached

Important: Ride-the-Wave is predicated on significant price momentum triggered by an EA. The 7-10 day scenario is the maximum trade hold-time. If you see post EA-momentum is halted or reversed by a significant opposite move, re-evaluate your presence in the trade.

This popular StockEarnings screen below will give you a list of stocks that historically exhibit significant price momentum following an EA for the next seven days:

  1. Stocks exhibiting positive post-EA price moves are buy-candidates
  2. Stocks exhibiting negative post-EA price moves are sell/short-candidates

The screen includes those stocks whose Earnings just came out in last two days.

Screen criteria:

  1. Earnings Date Start Date : Current Date + -1 Day
  2. Earnings Date End Date : Current Date + -2 Days
  3. Predicted Move (Next Day) Max : 7%
  4. Predicted Move (On 7th Day) Min : 7%

Strategy Guideline:

  1. Buy the stock if stock has reacted positively. Short the stock if stock has reacted negatively (see above).
  2. Close the position in 7-10 days, or possibly earlier based on price move.

Volatility Crush Strategy - Best for Options Traders

The Volatility Crush strategy is used with stocks that typically experience relatively low-to-moderate price moves (≤4%) following their Earnings Announcements (EA). The basic trade idea is to sell put or call options right before the EA, collecting a credit when options premium is very high due to elevated implied volatility (IV). You then close the position right after the EA by buying the option back much cheaper due to the significant drop in IV that occurs after the mystery of the EA disappears. In assessing this trade, you need to do your homework to ensure you collect sufficient premium to make the trade worthwhile.

This trade is practical due to the low-to-moderate price-move after the EA, which generally won’t significantly affect the options price, unlike an “action” stock, which experience great price moves post-EA. With these symbols, if you’re on the right side of the price move, that’s a great thing. But if you’re on the wrong side of the move, not so great. Consequently, by minimizing the effect of the post-EA price move, you have a much better chance to profit from the reduction in IV without it being ruined by a violent price move.

For this trade, open the position either (1) the night before the EA when the company announces earnings or (2) during the EA day when it announces post-market, generally capturing IV at or close to its peak.

For this trade, open the position either (1) the night before the EA when the company announces earnings or (2) during the EA day when it announces post-market, generally capturing IV at or close to its peak.

This popular stockearnings screen will give you a list of stocks which do not react more than 4% fpost-EA. It includes only those stocks whose earnings are releasing next day.

Screen criteria:

  1. Earnings Date Start Date : Current Date + 1
  2. Earnings Date End Date : Current Date + 1
  3. Predicted Move (Next Day) Max : 4%
  4. Options Type: Weekly

Strategy Guideline:

  1. Options Strategy: Sell Call and Put
  2. Options Strike Price: Current Stock Price – (% Predicated Move x 2)
  3. Expiration Date: It should generally be the closest expiry immediately after the EA.
  4. Buy Insurance: Buying back Call and Put at Strike price which 10% lower than Sell Strike Price is optional but recommended.

Watch Video for More Detail

Volatility Rush Strategy - Best for Options Traders

The Volatility Rush takes advantage of increasing options premiums into earnings announcements (EA) caused by an anticipated rise in Implied Volatility (IV). With this strategy, Buy a Call and Put at-the-money (a long straddle) 2-3 weeks before the EA when IV is lower. Sell the position either (1) the night before the EA when the company announces earnings pre-market, or (2) during the EA day when it announces post-market, generally capturing IV at or close to its peak.

This popular screen will give you a list of stocks whose Options premiums tend to rise into Earnings. It includes only those stocks whose Earnings are at least two weeks away from today.

Screen criteria:

  1. Earnings Date Start Date : Current Date + 15 Days
  2. Earnings Date End Date : Current Date + 30 Days
  3. Predicted Move (Next Day) Min : 5%
  4. Options Type: Weekly or Monthly if that lines up with the two to three-week lead-time for entering the trade

Strategy Guideline:

  1. Buy a Straddle at or close to the money two to three weeks pre-EA.
  2. Sell the position either the night before the EA when the company announces earnings pre-market, or during the EA day when it announces post-market.
  3. Expiration date should generally be the closest expiry immediately after the EA.
  4. Straddle price should not be more 60% of predicted move.

Since Last Earnings

Change in share price since last Earnings release.

Why is it Important?

When share has gained more than 10% since it's last Earning release, it tends to over react to minor bad news and give up some gains if not all. So, it contains more downside volatility than upside When share has dropped more than 10% since it's last Earning release, it tends to over react to minor good news and recover some drops if not all. So, it contains more upside volatility than downside.

EPS Surprise (%)

Occurs when a company's reported quarterly or annual profits are above or below analysts' expectations. Here is the formula to derive % EPS Surprice:

Actual EPS - Estimated EPS
------------------------------------- x 100
Estimated EPS

Why is it Important?

Earnings surprises can have a huge impact on a company's stock price. Several studies suggest that positive earnings surprises not only lead to an immediate hike in a stock's price, but also to a gradual increase over time. Hence, it's not surprising that some companies are known for routinely beating earning projections. A negative earnings surprise will usually result in a decline in share price.

Next Day Price Change (%)

Next Regular trading session Closing price following Earnings result.

For After Market Close Earnings, It is a next trading day closing price. For Before Market Open Earnings, It is the same trading day closing price.

Why is it Important?

Next Day price change is a reaction of Earnings result.

Frequently Asked Questions

You can download three following types of Earnings data:

1.  Upcoming Earnings Dates

2.  Historical Earnings Data (Last 25 Quarters)

3.  Historical EPS Data (Last 12 Quarters)

1. Download Upcoming Earnings Dates

What does this download include?

Upcoming Earnings Data download include the following:

1. Earnings Info

a. Symbol/Ticker

b. Earnings Date

c. Earnings Time

d. Estimated EPS

2. Company Fundamentals

a. Market Cap

b. Daily Average Volumes

c. Previous Closing Price

3. Proprietary Volatility Predictive Indicator

a. Volatility Prediction on Next Day

b. Volatility Prediction on 7th Day

4. Last three Historical Earnings Info

a. Earnings Date

b. Earnings Time

c. Closing Price Before Earnings Date

d. % Actual Move Next Day

e. Closing Price Next Day

f. Next Day Volume

g. % Actual Move on 7th Day

h. Closing Price on 7th Day

How can you download this information?

  1.  Go to the Advance Earnings Screener.
  2.  Fill in your preferences and click on “Screen Earnings”
  3.  A list of earnings will be displayed
  4.  In order to download, click the “save” icon and choose the download type as shown below:

2. Download Historical Earnings Data (Last 25 Quarters)

What does this download include?

It includes the following:

1. Earnings Info

a. Symbol/Ticker

b. Earnings Date

c. Closing Price Before Earnings Release

2. Next Day Price Reaction Data

a. Next Day Closing Price

b. Next Day Price Change (%)

c. Next Day Volume

3. 7th Day Price Reaction Data

a. On 7th Day Closing Price

b. On 7th Day Price Change (%)

4. Next Day Volatility Data

a. Open Price

b. Low Price

c. High Price

d. Close Price

e. % Volatility (High-Low)

How can you download this information?

  1. Search for a company by typing in the name or symbol into the search bar. The search bar is located at the top of the page.
  2. After selecting the company, scroll to the bottom where a hyperlink is provided to download the information. An example is shown below:

3. Download Historical EPS Data (Last 12 Quarters)

What does this download include?

It includes the following:This includes the Earnings Date & Time, Historical Actual EPS, Estimated EPS, EPS Surprise (%) and more.

1. Earnings Date Data

a. Symbol/Ticker

b. Fiscal Quarter

c. Earnings Date

2. EPS (Earnings Per Share) Data

a. Estimated EPS

b. Actual EPS

c. % EPS Surprise (% Actual EPS - % Estimated EPS)

How can you download this information?

  1. Search for the specific company by typing in the Name or the Symbol in the search bar. The search bar is located on the top of the page
  2. After selecting the company, you could scroll down to the bottom of the page where a Hyperlink is provided to download the information. An example is shown below.

What are the benefits of creating the watchlist?

1. Earning Dates Reminder: You will receive email reminders prior to the earnings date. Here is reminder frequency:

  • Sunday Alert: Last Sunday of Earnings Dates at 6PM EST
  • Two Days in Advance Alert: Two days before Earnings Date at 12PM EST
  • Same Day Alert: The Day of Earnings at 12:00AM EST

The reminder emails will also include our proprietary predictive indicator which predicts the next-day volatility in earnings.

2. Proprietary Indicators in Watchlist: It includes more than just Earnings Date and time. It also includes our following proprietary indicators:

  • % changes Since Last Earnings
  • % changes Since Last Earnings
  • Same Day Alert: The Day of Earnings at 12:00AM EST

3. Write Comments for each Stock: It provides ability to write comments for each stock. With access to this feature, it becomes easier to keep track of a selected strategy for each stock.

How can I create the watchlist?

Step 1 Pick any stock of your choice (For example: APPLE)

Enter the stock name or stock code in the Search Bar

Step 2 Select the Stock. You will be redirected to a new page, as shown below

Step 3 Clicking on the Star Icon on the top-right corner of the page adds the stock to the Watch-List

Step 4 Select “Go to My WatchList.” Doing so redirects you to a new page as shown below

How can you change the frequency for reminder emails?

Note: By default, reminder emails are set at three times a week. To change the frequency, please follow the below steps:

What is this feature offer?

For your convenience, the website uses a proprietary algorithm that predicts directional stock movement in Earnings. Simply put, it suggests whether the stock will go UP or DOWN in the next regular trading session. It basically serves as the next quarter’s prediction.

What if I wish to check the past predictions and the success rate of these past predicted moves?

You can check the past predictions of current quarter on this page. There is a Past Prediction tab right next to Upcoming Prediction tab as per displayed below:

What is this feature? How does it differ from the 1-Day Upcoming Prediction?

The proprietary algorithm predicts directional stock movement in Earnings Reactions and generates BUY signal. The return for past 9 quarters is more than 620%. We post predictions at 10:00 AM EST if we have any for the given day.

The difference is that the 1-Day hold prediction requires to hold the stock for one trading day. 7-Day hold Prediction requires to hold stock for 5 trading days.

What the advantage of Past Predictions tab on this page?

The advantage of this is that it shows you a Success Rate and Profit that can be earned on 2K (Profit for every $2000 invested) and it displays the Buy Price, Sell Price and Profit Percentage.

Images are provided below for your ease.

Upcoming

Past Prediction

What is Backtesting Directional Prediction? How can this be useful?

The websites Directional Prediction gives competition to the S&P 500. Backtesting is the feature where the website helps make predictions for Earnings on a quarterly basis.

This prediction is given on the basis of a comparison with the S&P 500.

How can I view data for the previous quarters?

In the table given, click on the available quarters. The page will reload to show a table of the relevant information.

The Backtesting page can be accessed using the below link

http://stocksearning.com/Stock-Earnings-Directional-Move-Back-Testing.aspx

What does the Backtesting table include?

  • Earnings Date
  • Earnings Time (Before Open / After Close)
  • Next Day Prediction (UP or DOWN)
  • Next Day Actual Move (% Value)
  • Profit (% Value)
  • Profit on 2K (Profit for every $2000 Invested)

Is there any easy way to add multiple notable earnings stocks to my watch-list besides going to each stock page and add them one by one?

Yes, by hitting the star button the left side of the company name

Note:

You must be logged in to make the most use of the website

How can I screen the Notable Earnings (Popular Earnings)?

When a vast number of companies release their Earnings on the same day, it may become difficult to screen for the Earnings of notable organizations for the purpose of trading or investment research. For your ease, there is an inbuilt page to screen the Earnings Data based upon predefined criteria.

This page can be accessed by clicking on the following link

When a vast number of companies release their Earnings on the same day, it may become difficult to screen for the Earnings of notable organizations for the purpose of trading or investment research.

Is there any easy way to filter or to screen popular Earnings on your website?

Yes, you can do this very easily by simply going to Notable Earnings page. The page provided also predicts volatility and stock movement since last earnings for Notable Stock Earnings in addition to Earnings Date & Time and Estimate EPS.

Is there any easy way to filter or to screen popular Earnings on your website?

Yes, you can do this very easily by simply going to Notable Earnings page. The page provided also predicts volatility and stock movement since last earnings for Notable Stock Earnings in addition to Earnings Date & Time and Estimate EPS.

Is there any easy way to add multiple Notable Earning Stocks to my Watch-list besides going to each stocks page and adding them individually?

Yes, you can do this by simply clicking on the star that is located on the left of the company’s name.

How does it differ from the other features on the website?

This segment is a valuable feature that the website offers. This page helps users track all the companies that are chosen and provides a ready chart (table) of the Earnings Date, Predicted Move, Change in Share Price since Last Earnings and Estimated EPS for upcoming earnings.

Will it show the Earnings Date of the Stocks that are listed on my Watch-list?

Yes. The page will show the Earnings Date of the Stocks listed on the Watch-List.

If I like the Notable Earnings page, is it possible to receive email alerts of this list? Is there an option to receive alerts prior to the actual dates of Earning?

Yes. Information is sent via email three times a week. The format of these alerts is shown below.

If I like the Notable Earnings page, is it possible to receive email alerts of this list? Is there an option to receive alerts prior to the actual dates of Earning?

Yes. Information is sent via email three times a week. The format of these alerts is shown below.

  • Notable Earnings for Today (Every day at 12:30 AM)
  • Notable Earnings for Next two Days (Every Monday, Wednesday and Friday at 1:00 PM)
  • Notable Earnings for the Entire Week (Every Sunday at 6:00 PM)

Is there a way to follow the performance of the Notable Earnings?

Yes. You can follow the performance of Notable Earnings by clicking on the link provided below.

Post-Notable Earnings

This feature also highlights the EPS Surprise, Next Day Price Change and Change in Share Price since Last Earning.

What type of screenings criteria do you use to come up with Notable Earnings list?

These appear on our upcoming notable Earnings matrix on the basis that they have the following criteria:

  • Market Cap is more than 1B
  • Avg Daily Volume is more than 1M
  • % Volatility derived from our Predictive Model is more than 5%
  • Stocks are traded on only either Nasdaq or NYSE
  • Stock prices are more than $5

Given below are images that will help the User to differentiate between the two pages discussed above.

Upcoming Notable Earnings

Post Notable Earnings

How can this be useful to earn more?

These stocks tend to be the most volatile stocks following Earnings result. You may prefer being aware of these stocks as volatile stocks are traded more frequently. This information can provide you with an opportunity to Buy or Sell in order to make a higher earning, if the timing is right.

What is the advantage of having this page? How can I utilize this page?

This page provides a Historical Price Reaction after Earnings on the same page, without the need to browse other pages.

You could select the + symbol to expand the Historical Price Reaction after Earnings.

What features will the table/chart include?

For your ease, the table would include the following information:

  • % Predicted Move – Next Day
  • % Predicted Move – After 7 Days
  • Estimated EPS (EST EPS)
  • Market CAP
  • Average Daily Volume
  • Previous Close

The above feature would help to look at the Stock Earnings and what the predictive measure had indicated. This chosen format will help you decide if the indicators were helpful in making the right decisions.

Just to give you overview of how the page looks please see the picture below:

OR

Click on the link below to be directed to the page

How can you inculcate the Earnings News to earn profits?

Once you utilize other features on the website, the Earning News page will help provide an idea of why our company predicts the shown movement of the stock in question. This page along with providing a qualitative idea, will help you develop strategies ahead of time.

What does this page look like & how can I find news for a particular stock?

To access this page, you must click on the “More” tab which is found on the Top-Right corner of the page. A dropdown box shall appear, where you can select “Earning News.”

After the page has loaded, you may choose to “Read More” which shall display the whole article.

How is it different from other websites which has similar feature?

We only display the earning related news unlike other website which show all the world news

How to search the news for a particular company?

You can search the specific company by typing the name on the search tab on the top of right side of the website.

For Example

What is Popular Screens?

This is a feature related to the Screening function of the website. The Popular Screens is based on constraints which are considered important.

  • Earnings with Market Cap more than 1B ($1 Billion)
  • High Volatile Earnings
  • Low Volatile Earnings
  • Earnings with weekly options
  • Earnings with stock price more than $30
  • Simply clicking on these options gives you a prepared list, based on the selected option. It is a quick-jump option which allows a user to avoid filling all the constraints manually, if they choose to do so.

Where can I find the “Popular Screens” segment?

This page provides a Historical Price Reaction after Earnings on the same page, without the need to browse other pages.

You could select the + symbol to expand the Historical Price Reaction after Earnings.

What features will the table/chart include?

To reach to the Popular Screens segment, follow the below directions.

  • Step 1: Click on the Earning Screener tab on the website
  • Step 2: On the Right-Hand side of the page, there is a box with the heading “Popular Screens”
  • Step 3: Select by clicking on the most suitable Popular Screen.

How can I subscribe to the free newsletter?

You could scroll down to the bottom of our homepage and enter your email address to sign up for our free newsletters.

How do I become a premium member?

To access all our features and maximize your gains, you can subscribe to our premium membership by clicking on the ‘Sign Up Now for FREE Trial’ button on the top right corner of our homepage.

You will then be redirected to a page where you could select our monthly or annual subscription plan. The monthly plan (billed quarterly) and the annual plan is priced at $29.99 and $249 respectively.

Join over 30,000 investors who get daily notable Earnings alerts with predicted move.