I learned a VERY important lesson

Wow. SNDK lost 20% today. Geez. They really punished that stock. I thought I was upset AMD went down 2 points from where I purchased it. I'd go crazy with the amount of shares I buy if that happened to me. Usually, I try to get out of stocks before earnings. However, I thought AMD would do fine. It will be back up next week, but shorted it for the earnings anyway. Did the same to INTC and YHOO. SNDK though may be a buy point in a few days. :/ You live and learn. I am sure something like this has happened to all of us one time or another.

 

I totally disagree with that statement. If you know the company and what it does and have any idea of the demand for the products or services it sells then you would be missing some great opportunities. If you don't have a clue and are just looking at a chart, then yes, it is gambling unless the stock has been hit so hard there is little probability it can be hurt worse. Again, you have to know the company. You have to know how it typically guides the street. Many many times you can get an idea if a company is going to do ok just by listening to conference calls in similar sectors or vertical sectors.

 

Wouldn't one want to play earnings with some sort of ratio backspread strategy? It seems like buying or shorting a stock around earnings is just pure gambling.

 

Hey cash - if nothing else, remember this quote "Sometimes you have to go backwards to go forwards".

Very true in trading and it looks like this was an important lesson to help you go forwards even if temporarily going backwards.

 

Yes, I would agree that is very risky. I don't do that though..I wait for the market to make its move, then I jump... unfortunately for me, I jumped in front of a train on my last trade.

Volume seems to be the key factor when trading gaps. Today FLSH fell like a stone, but LOGI managed to hold at - .54 in todays trading, because of its strong volume from yesterday.

http://stockcharts.com/h-sc/ui?s=LOGI&p=D&b=5&g=0&id=p64038442953

 

So cash, you didn't know FLSH had earnings today? (thru SNDK)

 

Sadly, no. When I was scanning for gap plays I found FLSH, and blindly assumed that the reason for the gap was a better than expected earnings report, not knowing sndk had anything to do with them. :eek:

[ note to self ] --> Check each stock for its "parent" company reporting, if any.

cm69

 

buy options, reduces your risk exposure significantly.

 

I don't know how - can you explain shortly?

 

This is one of the reasons why i left stocks and went into eminis..... gaps behave diffrently in futures mkt than they do in stocks.