Trading stocks & options during earnings period
We had a few productive trades this earnings season and our analyst pulled this one out of the recent trades (for ROKU) to share on this forum. So ROKU had earnings reports this past week and they reported a larger than expected loss on rising revenues and growing subscriptions. The after market earnings report caused a sell-off in the equity which understandably, is a volatile one but liquid enough to trade actively.
So in the after market after the earnings report, we bought some 500 shares and sold it the following day for an overnight buy/hold trade. Then yesterday, we did not consider that this earlier trade in the underlying stock was not quite good enough, and therefore indulged in a straight option call on our favorite day of the week to make those bonus options trades, yes Thursday. So here are the trades for you to see that we extracted from our trade transactions export ahead of the statements which are only available tomorrow:
We present options and stock trade ideas for our weekly swing trade newsletter subscribers and ROKU was in that newsletter as well. During earnings season, and as a trader, all one can do is wait for the news to evolve and then enter the trade knowing why reactionary moves occur after earnings.
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Risk Disclosure: Futures, forex, currencies and stock/options trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results. Past Performance Disclosure: Past performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between actively monitored performance results and the actual results subsequently achieved by anyone using any traders newsletter service . There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of actual or simulated performance results and all which can adversely affect trading results. Although, TradeGuidance never presents hypothetical or simulated trade results, all trades presented can be in a simulated using back-testing to demonstrate similar results.
Recent articles from this author
- Trading stocks & options during earnings period – Friday, November 08, 2019
- Trading WTI after the EIA news – Thursday, November 07, 2019
- Measured moves – Index futures – Wednesday, November 06, 2019
- What’s up with the pullback in Gold today – Tuesday, November 05, 2019
- Treasury futures anyone? – Thursday, October 31, 2019
About the author
Murali Sarma, Vice President of Business Integrations Inc., is an internationally known commodities analyst, author, trader and business consultant who has demystified commodity trading and introduced numerous futures trading strategies and indicators to traders – professional, non-professional and the novice trader – throughout the world. Murali began his trading career in the pre-dot-com bubble in 1998, electing to seek instruments to trade which had lesser volatility and offered more predictable analysis. From about 1999 to 2002, Murali traded out of the UK and moving to the US after that and working mostly independently with individual traders while learning from some of the best analysts and traders. While not being formally certified as a commodities trader, Murali preferred to hone in on his analysis and trading skills versus adding academically to his credentials. Murali believes that is isn’t about being right or wrong on your calls, it is about making money!
Murali has helped several traders become successful over the last 10+ years of active futures trading and has a strong following of traders who like to seek out opportunities in the futures markets on a daily basis versus following the old “buy & hold” investing adage. While not being opposed to switching hats and becoming an “investor” every so often with swing trades in the equities markets, Murali prefers to trade what he can see on charts using multiple timeframes and handcrafted indicators suited for all types of markets. Murali excels in trading sideways and choppy markets with a scalping style of being in-out of intraday markets when there is no defined trend, and on most other days prefers trading to his own computed target levels during the intraday timeframe, while following the trend.
In recent months, Murali has started a Twitter based alert service for intraday futures traders who like to trade commodities and index futures, and elected to blog post his daily analysis in commodities like WTI Crude & Gold and index future instruments like YM, NQ, ES & RTY. You may contact him via his email at firstname.lastname@example.org