Results Due

[the pro]

Hi Guys

Just a quick question for you experienced traders out there.

I am new to spreadbetting and I am putting the finishing touches to my pop-up rule book, that is programmed into my excel spreadsheet.

One of the rules is regarding trading around the results, or not trading around the results to be more accurate.

My warning box flags up if a trade I am about to place has results due in the next 30 days.

My average winning trade is 14 days, when in your opinion does the imminent announcement of the results start to affect the volatility of the share. I don’t want to be entering a trade when results are due, I suppose.

And also what are your thoughts and how long after results are announced to steer clear.

Just my take on things, glad to be put wise.

Thanks in anticipation

 

[bhupe]

I am not an experienced trader but I will share my two cents from my experience.

You may like to observe below point for deciding about a trading position with a earning reports due:

1) Sometime the news factor is already in the price, so a stock that was in accumulation stage may go into distribution stage on a positive earnings report. It is a two edge sword so it would be better to watch the support & resistance level for break-out or break-down.

2) Sometime the market would punish a stock on a negative earnings report, and this in turn would mean a lot of negative news about the stock concerned. Pay particular attention to the price action before and after the earning reports, the negative news may be the bottom of the stock concerned. To play on this situation would mean taking a trading position with a good stop loss, because the best risk to rewards ratio come from trend reversal situations. You may be stop lossed many times before the actual trend reversal happens so you have to be careful. (A good example would be blackberry price action last year where it went from 6-8 something to 17-18 something and then went backward again...)

hope this helps...
regards,
bhupe

 

[the pro]

I am not an experienced trader but I will share my two cents from my experience.

You may like to observe below point for deciding about a trading position with a earning reports due:

1) Sometime the news factor is already in the price, so a stock that was in accumulation stage may go into distribution stage on a positive earnings report. It is a two edge sword so it would be better to watch the support & resistance level for break-out or break-down.

2) Sometime the market would punish a stock on a negative earnings report, and this in turn would mean a lot of negative news about the stock concerned. Pay particular attention to the price action before and after the earning reports, the negative news may be the bottom of the stock concerned. To play on this situation would mean taking a trading position with a good stop loss, because the best risk to rewards ratio come from trend reversal situations. You may be stop lossed many times before the actual trend reversal happens so you have to be careful. (A good example would be blackberry price action last year where it went from 6-8 something to 17-18 something and then went backward again...)

hope this helps...
regards,
bhupe

Hi Bhupe

Thanks for your reply.

Having read your feedback, to be honest I am none the wiser, that is not to say that your reply was not informative, it was.

I have a stock outstanding at the moment, a spreadbet, it is carrying a nice profit at the moment, but in 20 days time results are announced. Now, is this period where there upcoming results are starting to be reflected in the price, or is that a bit nearer the time.

I am a very pragmatic trader and I trade what I see, I am not a great believer that there is any one correct price for a stock on any one day, supply and demand dictates that., that doesn’t mean though I don’t take note of the saying, “Buy on rumour, sell on fact”.

It’s just a case of timing, when is the rumour fully priced?

Many thanks

 

[bhupe]

I am also in the same situation as you are currently with five positions, but I am just going with the flow and a stop-loss so that I can concentrate on my next set-up. (I have just faced the heat from the earning reports of UK's three supermarket.)

regards,
bhupe



I will give you an recent example..

Hi Bhupe

Thanks for your reply.

Having read your feedback, to be honest I am none the wiser, that is not to say that your reply was not informative, it was.

I have a stock outstanding at the moment, a spreadbet, it is carrying a nice profit at the moment, but in 20 days time results are announced. Now, is this period where there upcoming results are starting to be reflected in the price, or is that a bit nearer the time.

I am a very pragmatic trader and I trade what I see, I am not a great believer that there is any one correct price for a stock on any one day, supply and demand dictates that., that doesn’t mean though I don’t take note of the saying, “Buy on rumour, sell on fact”.

It’s just a case of timing, when is the rumour fully priced?

Many thanks