Trading earnings announcements....

Discussion in 'Trading' started by BillySimas, Oct 20, 2011.

  1. Just wondering what kind of edge one might possibly have with a 'finger on the trigger' type of strategy by trading milliseconds after an earnings announcement is made. I'm just speculating here but I would imagine you'd need to physically be present at the earnings event or communicate with someone there because even the live conference call is probably delayed at least a tenth of a second or so. Secondly, I'm wondering what would be involved in finding a method of execution that's fast enough to take advantage of this and whether or not it would be available to any typical retail trader. I've been watching time & sales lately and looking at orders right after earnings announcements are made and it seems that there are plenty of people employing this type of strategy and I'm curious to find out who these people are and how they're getting away with it.
  2. Earnings season used to be great. Fast traders with the ability to read and react to earnings were crushing it.

    Unfortunately, now there is very little liquidity after hours and the news bots can analyze the headlines and move prices before the naked eye can read the first letter of the announcement.

    In other words, the strategy you were thinking of using is dead.
  3. N54_Fan


    Agreed. Besides I have noticed that the immediate reaction may be in one direction only to reverse course HARD within 5 min or so as the moves seem rather impulsive to start. Very hard to trade around earnings so i stick to ETFs around earnings to help minimize wide swings in price. One stock moving 15% over a few minutes will have less effect on the ETF.

    BTW,...AWESOME forum name "Clubber Lang"!! Big Rocky fan here too!!
  4. Thanks!