Earnings & Reports

Published: 09 Jan 2021

Earnings season is where all the real movement happens in stocks. Every publicly traded company is required to report its financial performance quarterly — that means 4 times a year.

You want volatility? This is where it is.

These reports include:

• Revenue
• Net income
• Earnings per share (EPS)
• Forward guidance
• And sometimes just corporate cope

Why do earnings matter?

Institutions trade based on expectations. If a company beats expectations, price often shoots up. If it misses, it can crash. But here’s the catch — it’s not just about numbers, it’s about sentiment around the numbers.

If a company reports good numbers but gives weak guidance, stock still tanks.
If the numbers are mid but guidance is optimistic, stock pumps.

Key Terms:

• EPS (Earnings Per Share): Net income ÷ outstanding shares. Most-watched metric.
• Guidance: Company’s forecast for future revenue/earnings. More important than current numbers sometimes.
• YoY / QoQ: Year-over-year / Quarter-over-quarter comparisons. Used to spot growth or decline.
• Surprise: Difference between reported and expected EPS. Huge factor in post-earnings price action.

How to trade earnings?

• Some people swing into earnings hoping for a pump. That’s a coin toss.
• Smart money waits for the reaction and trades the volatility after.
• Even smarter ones avoid it unless there’s a solid edge or hedge in place.

Watch for:

• IV crush in options (→ [[Options Greeks]])
• Volume spikes
• Whiplash moves (price fakes out both directions, its great for straddles or fully hedged positions if you can manage)

When is earnings season?

Usually starts 1–2 weeks after each quarter ends:

• Q1 earnings → April
• Q2 → July
• Q3 → October
• Q4 → January

Big names like Apple, Microsoft, Tesla usually go first or somewhere early — they set the tone for the market.

Where to track earnings?

• TradingView Calendar
• Yahoo Finance
• MarketWatch
• Seeking Alpha
• Earnings Whispers (for dates + sentiment)

Set alerts for big names. If a major index stock is reporting, it can affect the whole market sentiment.

Final thoughts:

Earnings = opportunity but also risk. Every Opportunity is a risk in one form or another. Avoid gambling unless you’re hedged or sized small. Let volatility settle, find a level, then plan your trade.

If you’re holding a position into earnings — that’s not a trade, thats a bet. Unless you have satellites monitoring the parking lots of Walmart to determine wether they will perform above expectation (yes some hedge funds have used that technique to make money).