Online Trading Blog

Companies listed in stock exchanges have to release and file their earnings reports every three months. The period in which most companies report their earnings is a period of high volatility. Many traders, especially short-term traders and swing traders, closely watch the earnings calendar to find good trading opportunities.

• The earnings period is noticeable with high price volatility, rumors, expectations and more news.
• This is the period when companies are highlighted in the media, criticized for their performances and comparisons are made.
• This is also the period when new growing or profitable companies and underachievers are identified and company stocks are valued on their merit.

Trading the earnings calendar is a very difficult strategy to master as there is no surety that the stock price will go up with positive earnings reports or fall with negative earnings. The market expectation of a company, the comparison of a company's earnings with others or the industry performance, surprise factors, and other market factors, all come into play. Many swing traders follow the earnings trading strategy of 'buy the rumor and sell the news.'

Trading the earnings calendar is a very risky trading strategy as it requires very good skills in picking the rumors and evaluating them, very good market timings and position sizing, and a sound risk management plan. Often companies can change their earnings reporting dates and the surprise factor is so important that it can take the price in either direction within a very short period of time; of course if no surprise, the prices are expected to stay the same.

To stay on top of the latest earnings announcements or to search for historical earnings, check out NobleTrading's earnings calendar.

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