holding through earnings release

Discussion in 'Trading' started by Satan, Oct 1, 2001.

  1. Satan


    where do you guys stand on holding a position through an earnings release? i'm speaking from a swingtrader's point of view.
  2. I never, ever do it. You never know how the stock is going to react in the short term, and God forbid they have a terrible outlook or conference call and the stock you're long gaps down 10 points. It's just as easy to get out of the position right before the earnings and get back in if the stock is basically unchanged by the news.
  3. Yes... I did it once and the company came out with spectacular earnings. The market was wanting to move lower though and my wonderful little stock went down from 15 bucks to 12 bucks to 10 bucks to 7 bucks to 4 bucks to 2 bucks and then to under a buck and now I can't even get a quote on it. Boo hoo hoo. I will never again hold through earnings. I'd also advise you against it. :mad:


    PS I had 500 shares and bailed out when it was down by about a buck. Lesson two: Always keep your stops and if you think a stock should be going up and instead it goes down THEN get out of it. Don't argue with yourself just do it.
  4. Magna

    Magna Administrator

    I would only consider it if the stock was a position in a very long-term portfolio that I intended to hold for years. But as a daytrader or a swingtrader (or even a position-trader who holds for 1-3 months) I wouldn't even consider it. Way, way too risky. If you like the general activity of the stock then sell it before the earnings and buy it again later. Give up the chance for the gap in your favor and you'll be protected from the gap against you. And rarely do they gap up as much as they gap down.
  5. vinigar


    I am only guessing, but chances are if your daytrading or even swing trading it, you haven't researched its fundementals very well. If you have researched it well then you will have a good indication of its past earnings performance and will also be on top of its expected potential...even so...in a bear market stocks that meet expectations can still go down dramaticaly...Even stocks rated AAAA by Investors Business Daily falter and go downward...I think most of the members here have given you good advice...in most situations...DON'T DO IT!:)
  6. I 've never done it and probably won't do it, I really can't afford to lose a few K's on one position, but I think it is sometimes not unreasonable to risk 100-200 shares if you can afford to do it. There is a pattern, if the stock sold off steadily going into the conference call that day and the daily chart doesn't indicate that it might fall off a cliff the next day i.e there is some kind of support AND the overall market has sold so hard that it can't go much lower I would say it's playable if you are bit crazy. You can wait to buy in AH but it moves in a flash. Anyway it 's a bit of a gamble, but no crazier than holding overnight on GNP's in my opinion.
  7. Satan


    to be honest, i agree with you guys. i always check before i enter a position to see if earnings are due out soon. if they are, i either pass or exit the position prior. i posted my original message because i'm short RIMM, earnings are due out this wednesday, and the daily chart looks too good (downtrending) to cover.
  8. If you are going to hold a position through earnings, it's much better to be short than long, so you might be okay. Particularly in the current market environment where stocks don't have the strength to rally very hard and any gap ups are usually filled in and retraced, compounded with the economic problems, I wouldn't be averse to holding a short position through earnings on a tech stock.