New to Trading Earnings? Here’s an Example
This week we had the opportunity to witness an ideal example of an earnings release trade. We share it here for those who are new to stock trading to get a clearer picture of how trading earnings can go.
On June 4, Tiffany & Co reported its Q1 earnings before market open. The company is a favorite among earnings traders because its stock tends to make moves after reporting. Wall Street was expecting the company to report earnings per share of $1.01, but there were whispers among analysts at a possible EPS of $1.03.
$1.03 was precisely what Tiffany & Co reported, which led to a gap up in the price. Within two hours of the market opening TIF stock went from $90.20 to $95.87, netting savvy earnings traders a quick 6.3% profit in a couple of hours. It was the perfect combination of a rumour that proved to be true and a report that was released before the market opened, allowing for a gap up at market open even though the company’s earnings were actually lower than Q1 of 2018.
Disclaimer: This article is not investment advice or an investment recommendation and should not be considered as such. The information above is not an invitation to trade and it does not guarantee or predict future performance. The investor is solely responsible for the risk of their decisions. The analysis and commentary presented do not include any consideration of your personal investment objectives, financial circumstances or needs.
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