Investors beware: Hunting season
Earnings season is here.
Earnings is like hunting season.
Lots of animals running around.
How does hunters catch prey anyway?
1. Set traps for the animal to run into
2. Shoot when the animal is resting/immobile
Let's translation it into investing:
How to hunt stocks during earnings?
[Thinking] ever see hunters carry their Big guns and chasing after animals?
Somehow, I can't picture that Image.
But when we buy stocks to anticipate earnings. We are doing exactly that.
We are chasing the animal in a single direction, and Hope to somehow hit it. We may getlucky and hit the animal. But guess it's exhausting and unreliable. The animal can alwaysturn around and change direction.
Stocks are extremely volatile during earnings, and go all over the place. It's tough to anticipate. Directional options strategy have thesame problem.
How about we set traps all around the animal Instead? [Thinking] do we have the moneyto put so many traps for 100% chance of success? It may cost even more than buying the animal directly from open market.
Let's translate this into stock context:
There are non directional strategies that we can use. Option Strategies like straddles and strangles, are non directional and cover both positions. in a sense, trapping and cornering the animal. But there's still a problem, straddles and strangles are expensive to execute. The returns may not cover the costs.
[Sweats] somehow seems to have no easy way to hunt the animal.
Still seems to be the easiest to hunt the animal when it's not moving.
In short, avoid earnings season especially if we do not have sound strategy to catch the animals. May end up either wasting resources or wasting time.
In general, it's better and safer to hunt stocks when the prices are more stable And we have better clarity to take a clear shot.
Happy hunting to all
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
- OSJ·2022-04-15if u dont stay invested, what do u do with your cash? Let it rot?4Report
- Sing Options·2022-04-14better to have protection also, else the hunter may become hunted.2Report
- FranklinMorley·2022-04-14Thanks to the author's warning, the scene you described makes me a little worried. Which stocks are the most dangerous?1Report
- zinglee·2022-04-14What's your plan to Chinese tech stocks?LikeReport
- prestomanik·2022-04-14buy the dip ay3Report
- trader1216·2022-04-15Dca all the way2Report
- muahaha18·2022-04-15Its important to be careful2Report
- RKT·2022-04-15I bieve this is still not hunting but waiting season for big catch to arrive in shooting range.1Report
- 嘛嘛财商FQ·2022-04-15[财迷] [财迷] [财迷] [财迷] [财迷]1Report
- Kellylohlim·2022-04-15this is good stuff2Report
- Tigercub·2022-04-14Good friday. Take a break for the week. Happy lWE people.1Report
- yong168·2022-04-14[惊讶] [贱笑]2Report
- Nagoken·2022-04-14Well said2Report
- Svengers19·2022-04-15Thanks for sharing1Report
- octa8·2022-04-15Great ariticle, would you like to share it?1Report
- DivHolder·2022-04-15[Happy] [Happy]1Report
- Pimple933·2022-04-14earnings session is volatile, good for options.1Report
- LeilaLynch·2022-04-14I very much agree with the author's point of view that human beings have the mentality of conformity, and many investors will follow the trend.1Report
- littlesweetie·2022-04-14At a time when the market is full of uncertainty, we should indeed invest cautiously, for the cumulative effect is likely to lead to adverse consequences.1Report
- Humbly·2022-04-15As stock volatility increases during earnings season,there may be possibility of earning extra income by playing on this rise in volatility which causes option price to increaseLikeReport