Historically there is huge volatility during earning result season. Companies report their performances every quarter. This is the time even stocks see good liquidity in options and futures trading.
Note: In India compared to developed countries liquidity in stock options and futures is very low. Therefore is is recommended to trade only popular stocks during results season as volume spikes during this time. It is also highly recommended to hedge your future or option position to avoid huge loss in a highly volatile market. You can learn hedging options and futures by doing my course.
During result season there is a sudden spike in volume because every type of trader with jump into trading to make quick money. Whether they are positional, intraday, swing traders, long term investors also for the time being become traders, HNIs etc, everyone will try to make a quick buck trading.
In this article you will read some tips to Intraday (day trade) stocks during earning season:
Do Not Start Trading As Soon As Market Opens – Wait For The Trend to Form
The first ten minutes the stock whose results were out yesterday will be very volatile – within minutes the stock will go up and down by a few points – it will hard to know what the final trend will be. So it is recommended to wait at least 15-20 minutes to follow the trend.
Ignore Gap Up or Gap Down Openings
Gap up may lure you to go long and gap down opening will lure you to short the stock – do not do this mistake. Gap up and down are just reaction to the news – the final trend does not depend on it. Di not get lured by gap up or down of a stock.
On this day you will see that some stocks will gap up and then go down, some stocks will gap down and then go up. If you do not want to ignore this its better to check daily chart of the past couple years on that stock. You must see what happens to the stock after gap up or down. If in more than 60% of the days it usually follow through the opening then you can follow the Gap up or down opening, else ignore.
High Volume in Call and Puts May Confuse You
Next day to earning day the stock will see higher than average volume, this is usual and must be ignored. You may see more open interest in the CE (Call) side and less in PE side and you may think the stock is headed up, well that may not be the case. Similarly more open interest more in the PE (Put) side does not mean the stock is headed lower.
Trend on this day is most important that any other factor.
Do Not Book Profit In Full Trade
It is seen that the earnings usually keeps the trend for about a week. So if you have decided to trade a stock, try to book partial profits on the same day and leave some stocks for the rest move for a move well beyond it’s average true range. You can then exit with bigger profits within a week. Keep a trailing stop loss to your buy position for the rest of the stock, so that you do not make a loss in the trade.
What You Can Do If You Want to Trade Stock Futures With Hedging
In my conservative options and future course there are two strategies that deal with how to trade futures with low risk with hedging and unlimited gain. This will make sure you lose less and make more over time making sure your trades results in more profits than losses.
You Can Read More On My Site
Hi, I am Dilip Shaw, owner of this website. I am a trader like you. I have been trading since 2007, but lost a lot of money till 2010. I then stopped trading and studied options like college exams. Started trading again from 2011 and never looked back since. I did a lot of research, read books and did countless paper-trading before being profitable. You can read about me here.
My conservative trading course since 2014 is helping many retail traders just like you who have a job or business make consistent profits like this:
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One Of My Client Is Making Rs.25k Per Week
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What Others Charge for Courses
You can do this course from your home. Some traders make amazing profits like Rs. 16.26 lakhs profit in 5 days though results may differ for all.
This course helps you learn to trade conservative option strategies for monthly income. Once you finish the course you can start trading immediately. You can start trading from any day. No need to wait for expiry. You will make profits consistently.
This course is good if you have a regular job or business. You DO NOT NEED to monitor your trades every second.
What You Get?
Before reading please understand that for all 5 strategies, strike selection will be taught. Strike selection while trading Options is the most essential part to succeed.
You get two conservative non-directional strategies on options, one conservative stock option strategy and two conservative directional strategies on Future & Option combination.
Non directional trades are profitable 80% of the times and make 3-5% per trade (Results may vary).
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The stock option trade makes 30,000 in one trade and if SL is hit there is a way to recover losses plus make 30k in that trade.
Technical knowledge is NOT required. No need to monitor trades every second.
In the course you will learn how to select the strike prices. You learn when to trade, which strikes to sell which to buy, how much profit target you should be looking for, the best place to take stop loss and what to do after taking stop loss – means how to get that money back. The success rate is more than 80%.
Since trades are properly hedged there is no stress in trading my strategies.
I am very confident that you will make money trading my strategies. To help you succeed I offer few months support for FREE.
11 Reasons Why You Should Do The Course:
1. TA Knowledge NOT required
2. NO Software Required
3. Regular Monitoring NOT Required
4. Continue with Your Job
5. Do Course From Your Home
6. 100% Hedged
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8. Not too much money needed to trade
9. Scaling Possible
10. One Time Fee
11. FREE Support For Months
To know more Call/SMS/WhatsApp me on 9051143004 or email me now. I know English and Hindi.
Read the details of the course here.
If you want to enroll for the course you can do so here.
P.S: So many years of trading has thought me one thing - it is always better to make small profits month after month, rather than lose money month after month trying to make too much money. It never happens. But small money accumulated month after month can become very big in only a few years.
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