How do you deal with earning?

3 stocks that I day traded yesterday pops 8% or more today. I knew earning for them and didn’t want to risk it cause I got burn in the past. So for those who are successful in playing earning. What criteria made you to hold them for earning?

 

I rarely play direction on earnings myself.

 

I’ve personally never researched or tried to develop a strategy around earnings so I just avoid them. I have nothing better then a coin flip on it.

 

If you swing trade them, DO NOT HOLD overnight. You can make an edge daytrading baskets of carefully selected liquid stocks.

 

Holding overnight is the defining characteristic of swing trading.

For OP, position size management. You can price the straddle to get an idea of expected move and adjust positions accordingly.

 

Straddles are less accurate than ATM IV for expected move, I found. Not by much, but by a little.

 

Unless you’re a long term investor, or have inside info, holding overnight through earnings is pure gambling.

 

To swing trade earnings, you must hold overnight through earnings. A better way would be to say do not trade earnings if you're a swing trader...or better yet, something about position sizing.

 

I am horrid at trying to forecast what is going to happen after earnings reports. Now, I just trade around it. Of course, you are possibly, giving up the huge price swings which could give you huge returns in a few days. On the flipside, you could lose your shirt too! I'll take what the market gives me before and after the earnings reporting dates. Lots of trading opportunities every single day.

 

Yes, this. Position sizing and diversification can help, but still doesn’t solve the risk/reward problem with that style of stock trading. You simply can’t get a good handle on the math. One bad blow can wipe out months of gains. Best swing trading products are major indexes and sector ETF’s giving you nice broad exposure.