ajax loader

Loading...


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.

Predicted Move (Volatility)

Similar to Implied Volatility in Options. Expected volatility % based on our Proprietary Volatility Predication Model. We are expecting that stock price will likely to reach % in either direction by the end of next trading session after Earnings are released and not necessarily the closing volatility %.

Why is it important?

    This indicator helps

  1. Knowing expected volatility in stocks after Earnings helps to decide trading stocks before Earnings Announcement.
  2. Taking Advantage of volatility collapse following Earnings Results by using Advance Options strategies such as Spread and Straddles.

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.

ACE Ltd (ACE) Earnings Date

Add to Watchlist (Why?)
ACE Ltdhas not confirmed Earnings date and time yet. Estimated Earnings Date is Coming Soon... It is derived from historical Earnings date and Earnings week for this quarter. If you have added ACE stock in your watchlist, you will receive reminder email about the Earnings Date Confiration once ACE confirms the date.
The Algorithm predicts "% Predicted Move After Earnings Announcement" (PMAEA) for ACE three weeks prior to earnings date. Knowing PMAEA for ACE three weeks before Earnings Announcement can provide unique advantages in trading Earnings.
Please visit FAQ section to learn on how we calculate PMAEA for ACE and how we use it to trade Earnings successfully.

Earnings Date : Coming Soon..   

Following Earnings result, share price were UP 12 times out of last 23 Qtrs

Since Last Earnings 0.0%

Price at Last Earnings: Previous Closing Price: .00

Sign up for our newsletter.
Never miss Earnings Date again
for
ACE

It's Completely FREE:
  • Predicted Move on 1st Day: Login to view
    PE Ratio: N/A
  • Predicted Move on 7th Day: Login to view
    Estimated EPS:
  • Avg Daily Vol / Next Day Vol: 2,343,160 / 2,988,554
    Short Ratio: 0.00

Stock Price Change Since Last Earnings Released:   0.0%

Sign up for our newsletter.
Never miss Earnings Date again
for
ACE

It's Completely FREE:

ACE Ltd (ACE) Frequently Asked Questions

1. What does "predicted % change after earnings announcement" mean?

It represents the stock predicted price change after the latest earnings call. If the stock price announcement is positive, it will facilitate a percentage increase before the end of the trading session after the earnings release. A negative announcement will facilitate a percentage decrease before the trading session ends.

2. Why is the "Predicted Move" for ACE an important consideration for investors?

The goal for individual traders and hedge fund managers it to ensure that they continue making profits while avoiding potential losses. It would be less than ideal to have ACE in your portfolio and then the morning after the company's call, a bearish ACE performance wipes out a significant chunk of your portfolio value. Performance predictions allow traders to execute a hedging strategy to protect their portfolio from unfavorable earnings which could lead to a major price drop.

We guide our clients on how to develop hedging strategies which will cushion them from a big drop in case the company announces displeasing earnings. Options traders can leverage the predicted move using strategies such as ride-the-wave, volatility-crush and volatility rush. Predicted move also allows day traders to decide whether to trade or avoid a stock.

3. What does Predicted Move After Earnings Announcement (PMAEA) for ACE mean? How can I use it to improve my trading?

ACE's PMAEA is Predicted Move for ACE is 1% and traders can use it in their volatility-crush and volatility-rush strategies.

4. How do you calculate ACE's PMAEA?

There are multiple factors to consider in the algorithm used to calculate ACE's predicted move:

  • a. Analysing ACE's past stock price performance after earnings announcements.
  • b. Evaluating demand and supply activities around ACE's earnings.
  • c. Studying the company's fundamentals.
  • d. Keeping track of peer companies and the price changes that happen after earnings releases in the same quarter as ACE’s scheduled announcements.

5. What does "Predicted Move on the 7th Day" mean? How can PM7thDay help me improve my strategy?

PM7thDay is a custom indicator for ACE. The current PM7thDay value is at 1% and it can be incorporated into the Ride-the-wave strategy.

6. What is ACE's next day trading volume?

It refers to ACE’s post-earnings trading volumes and it is not the same as the stock's average daily volume. ACE's next day trading volume is often 5 or 6 times more than the value of its average daily volume. The stock’s next day trading volume is 2,988,554.

7. ACE stock has rallied by 1% after its last earnings call. How can I use this information to my advantage?

Keep in mind that a stock tends to be extra sensitive to market news if it rallies by more than 10% after the previous earnings call. Also worth noting is that a 10% decline after the previous earnings call is a strong indicator that the stock has a lot of bearish potential. In this case, the stock will be extra sensitive to good news which means that it will have some potential upside if good news is released.

8. What options strategy can traders leverage for ACE.?

ACE's current predicted move is 1% which in other words means that the stock price is expected to move by 1% in either direction. If traders sell Put on Weekly Front Options where the strike price is as close as 2% from current stock price, then it is less likely that the stock will hit the strike price. This means that ACE options would be worthless upon expiry thus the trader retains the entire premium. You can also consider adding the 2nd leg on ACE stock by buying the Put option on the same Weekly Front Options with lower strike price. So your margin does not get tied up.

The above represents a good strategy which allows traders to benefit from highly volatile price movements during an ACE earnings call. Caution is necessary when executing the strategy because success is not guaranteed. The ideal scenario would be the ACE options expiring while worthless but in case it drops to the trader's strike price, then the trader has to execute a counter-strategy, which in this case would be to buy the stock.

Sorry! we are could not found Est vs Act EPS Data. If you think we should cover it, please let us know
Below table tells us that how ACE has been historically reacting after Earnings Announcement (EA). Following Earnings result, share price were UP 12 times out of last 23 Qtrs
Next Day Volume - Average Next Day Volume is 2,988,554 and Average Daily Volume is 2,343,160. This data point is very helpful if you choose to trade Earnings Result of ACE in the same Extended Trading Hours as it is announced. If the ACE trading volume in extended hours is less than 50% of next day volume, there is a great amount of probability for the stock to move in that direction following regular trading session.
Move On 7th Calendar Day - Below table also includes historical stock movement of ACE on 7th day after EA. This data point is important for Ride-the-wave strategy.

Want to view Historical Price Change in Earnings (Last 30 Quarters) for ACE? Sign Up Now

Historical Price Change in Earnings

  • Earning Date
    Closing Price Before Earning
    Next Day Closing Price
    Next Day Price Change (%)
    On 7th Day Closing Price
    On 7th Day Price Change (%)
  • 10/20/2015
    110.43
    112.95
    2.28%
    113.94
    3.18%
  • 07/21/2015
    102.62
    105.30
    2.61%
    106.31
    3.60%
  • 04/21/2015
    106.99
    105.87
    -1.05%
    106.75
    -0.22%
  • 01/27/2015
    108.61
    106.65
    -1.80%
    108.32
    -0.27%
  • 10/21/2014
    103.51
    102.68
    -0.80%
    105.78
    2.19%
  • 07/22/2014
    99.61
    100.70
    1.09%
    99.01
    -0.60%
The below table contains historical volatility in regular trading session after Earnings Announcement EA for ACE.
This data point is very helpful for gap trading because you could have a company that swings 5% +- but their final percent move is only a fraction. The reason why a stock not necessarily is very volatile after EA is because the investors are digesting information provided by companies in conformance call.

Sign Up Now and view last 25 quarters to see if ACE is the perfect candidate for gap trading.

Want to download historical Volatility in Earnings (Last 25 Quarters) ? Sign Up Now

Historical Volatility

Next Day
  • Earning Date
    Open Price
    Low Price
    High Price
    Close Price
    % Volatility (High-Low)
    % Closing Price Change
  • 10/20/2015
    111.86
    110.15
    113.92
    112.95
    3.40%
    2.28%
  • 07/21/2015
    104.84
    103.52
    105.44
    105.30
    1.90%
    2.61%
  • 04/21/2015
    106.28
    104.84
    107.27
    105.87
    2.30%
    -1.05%
  • 01/27/2015
    109.32
    106.57
    110.16
    106.65
    3.40%
    -1.80%
  • 10/21/2014
    104.25
    102.61
    104.77
    102.68
    2.10%
    -0.80%
  • 07/22/2014
    100.08
    100.05
    101.55
    100.70
    1.50%
    1.09%

Our Advance Stock Chart for ACE is one-stop-shop for all technical charting analysis. Here is what you can do with our chart.

  • 1. Perform the technical analysis on ACE
  • 2. Compare ACE with other companies
  • 3. Add an events calendar on chart.

You can also save the ACE chart. Here is how you can do it:

  • 1. Click on Camera icon located on top right hand side corner.
  • 2. New tab will be opened. In the new tab, right click and select "Save Image"

You can personalize the ACE chart by modifying the default symbol, watch-list, adding tools for technical analysis and a lot more.

Sign Up Now and personalize the ACE chart by modifying the default symbol, watch-list, adding tools for technical analysis and a lot more.

% 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.

Historical Volatility Next Day

Next Day Volatility (% Day High - % Day Low). It is a different from % closing price.

Why is it Important?

It is a very helpful indicator for gap trading because you could have a company that swings 5% +- but their final percent move is only a fraction.

Benefit of adding stock into watchlist:

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

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

Reminder emails 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:

  • a. % changes Since Last Earnings
  • b. % Next Day Volatility Predictive Indicator

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.

Predicted Move (Volatility) - 7th Calendar Day

Expected volatility on 7th day since Earnings results.

Why is it Important?

Higher Upside reaction on 7th day
  • If historical price change on 7th day is higher than price change on next day, stock tends to gain more from Earnings result. It supports Buy In Post-Earnings strategy.
Lower Upside reaction on 7th day
  • If historical price change on 7th day is less than price change on next day, stock tends to give up from next price gain. It supports Sell In News strategy.
Further Downside reaction on 7th day
  • If historical price change on 7th day is less than next day drop, stock tends to drop even more from Earnings result.
Less Downside reaction on 7th day
  • If historical price change on 7th day is less than next day drop, stock tends to recover from next price drop. It supports Buy In Dip strategy.

Join over 100,000 investors who get daily notable Earnings alerts with predicted move.