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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.

Premium Member Benefits

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Introducing Stock Trade Alerts; a powerful tool to help you make better investing decisions. Follow our 1 Day and 7 Day Stock Trade Alerts in the Earnings season, and spend less time and effort on selecting stocks that make money for you.

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What if you knew in advance how much a stock might move post announcing its earnings? Yes, it’s possible!

Get a head start in your trades with our Volatility Predictions feature; check out our volatility predictions based on our proven proprietary prediction model and screen stocks based on volatility at least two weeks before their earnings are announced.

An amazing feature for you, especially if you are looking to trade in Options too. Use this incredible information to be able to make early decisions in earnings.

How to use this to make money? You can buy call and put options (Straddle) two weeks before Earnings date if Straddle premium at the money is 30% less than our predicted move. Then sell it one day before Earnings Date and make a money on built up premium because of Earnings release event.

We have create three unique Options Strategies which helps to find profitable Options trading ideas from Earnings Announcements (EA). Here are them:

1. Volatility Rush Strategy generates simple call and put options trades 3 weeks before EA to take advantage of high volatility going into Earnings

2. Volatility Crush Strategy generates stocks for selling options premium to take advantage of high volatility getting crush after EA

3. Ride the Wave Strategy generates post earnings trade ideas for momentum following EA

All of three Options Strategies have short holding Period (1-3 weeks) so your money isn’t tied up for long periods of time

Have you ever had to browse ten different websites to gather data of one stock during the earnings season? Frustrating!

Wouldn’t it be awesome if you had an earnings calendar that not only provides the date and time of the earnings release but also provides its historical performance and next day volatility prediction all in one place? Check our Earnings Calendar for ease of tracking stocks in earnings season.

Further, get access to our Earnings Screener; a cutting edge screening tool built for Traders, by Traders. Whether you are an Event Trader, Options Trader, Gap Trader or Investor, our simple yet powerful tool screens stocks earnings by using our Volatility Predictive Model*. It provides the ability to screen earnings not only by earnings date and time but also, % next day volatility prediction, market cap, volume etc. And of course, you can download earnings data for further analysis.

Would you like to download earnings data for further analysis in the simplest manner? We provide you with three types of Earnings data, which can be easily downloaded for your analysis:

1. Upcoming Earnings Dates

2. Historical Earnings Data (Last 25 Quarters)

3. Historical EPS Data (Last 12 Quarters)

Upcoming Earnings Dates This feature lets you download all the company names and their earnings dates during the particular period which you have set, as per your requirement. Here is steps:

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

Historical Earnings Data (Last 25 Quarters) This feature lets you download all the historical data for last 25 Quarters for any company with various indicators. Here is steps:

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

Download Historical EPS Data (Last 12 Quarters) It includes the following:This includes the Earnings Date & Time, Historical Actual EPS, Estimated EPS, EPS Surprise (%) and more. Here is steps:

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, you could scroll down to EPS Chart. You will see blue color link to download the information

If you need more detail on how to download data, you can visit our FAQ Page. We have provided a great amount of details with images on how to download earnings data.

Now that you’re familiar and completely fascinated with our amazing features such as Directional Predictions, Volatility Predictions, Earnings Calendar, Earnings Screener etc., allow us to spoil you a bit more!

Because we believe in going the extra mile, we bring to you Earnings News to enhance your overall investing experience during the earnings season.

Further, when 100s of companies release Earnings on the same day, it’s very hard to follow the earnings of popular stocks. So, we have figured out the way to filter Notable Earnings based on predefined criteria!

Add to it, our Post Notable Earnings Analysis provides actionable trading ideas in post-earnings.

Now that you have experienced our incredible features, we look forward to your continued support and wish you all the very best for your investing.

It's not just an another watchlist. It provides three unique benefits:

1. Receive three reminders emails prior to Earnings Announcement (EA) in your mailbox.

2. Provide ability to write trading strategy or notes for each stock in your watchlist.

3. Keep track of Predicted Move and stock performance since last of EA.

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