Earnings Thread

I will probably be buying AAPL later. Lots of good choices today, but I think AAPL is the best out of them.

AAPL reports its earnings after the market closes. I think there will be an earnings surprise, so I will be buying call options. The benefit of a call option is that if you are wrong, your max risk is the cost of an option, which is much cheaper than the stock.

But if you are right, you get all the upside. More complex options strategies can make it even cheaper and safer to play options. But most of my students start out with call options and put options (for when you think a company will disappoint on earnings).

I have students playing TWTR and MDLZ today. I recommended long positions on these stocks but will not be taking positions because I believe much of the earnings surprise is priced into these stocks. You should watch the movement of a stock prior to earnings before jumping in because sometimes the pre-earnings movement "ate up" the gains from the surprise.

Also, NFLX is up today on the disclosure of a big buyer. It's a good place to short the stock. I might reopen my position here.

I have been following closely mate. I'm playing GOOGLE up earnings and I personally think bearish on AAPL..

Since we disagree on AAPL want to dive deeper?

You're buying after it's bumped up to 92$? Short call assuming it'll go up even further? Seems daring. What am I missing about that?

Sure. Everyone is focused on AAPL's hardware sales and ignoring software sales. Let's start there.

I'm also long on GOOG into earnings, by the way.

I shorted NFLX when it was $96. Now NFLX is only $4 below where I shorted it but the fundamentals have not changed - the bump upward is sheep behavior. Why not short it again if post-earnings movement showed the stock to be fairly valued at $86?

ahhh ok that's what I thought you were getting at with NFLX that makes perfect sense.

Interesting take on AAPL. You may be onto something there.

Thanks for the discussion. Illuminating.

From my newsletter:

The slowing of iPhone sales has punished Apple to the point of being slightly underpriced. The price, created by a selloff before earnings, gives longs a good opportunity to buy calls. I'm expecting a slight beat in light of increasing software sales (e.g., Pokemon Go) that has not been fully priced into the stock or into analysts' estimates, as they tend to overemphasize the hardware side of Apple's business.

The iPhone sales decline is no longer a surprise and is fully priced into the stock, so what's the downside? The only possible bad news Apple can release to crash the stock price is declining software sales, which we will not see. Software sales rose 20% last quarter and should show strength in this quarter's earnings report as well, redefining how investors see the stock and confirming bullish sentiment in this aspect of the company.

I don't expect a significant beat, but AAPL should move up at least a few dollars on earnings. This is a good long play into earnings with little downside; the worst is already over. Don't expect too much of a gain here, but do consider going long for a quick and relatively safe speculative earnings play.

This doesn't address the problems in China with the patents and halted sales. Much bigger problems than a sales slump.

I bought my 102 call on a while back. with this down tick it might be aggressive but even I'm surprised I'm bullish these guys.

>playing TWTR
>I recommended long positions
I'm sold.

Thanks a lot, mate!

Don't be surprised by the lack of replies on Veeky Forums, stock analysis is a bit more complex than the basic stuff that gets flooded here everyday. You need to research the financial reports of companies, have a slightly good idea of how the sector is moving in any given semester/trimester of the companies you're looking for, etc, etc, etc. It's a lot of work and it's normal that people who aren't skilled into this might not find the appeal of it.

That being said, I'm quite surprised at your report on GILD. Dunno what position you took there but if I had read it before making a decision I'd go for short and it would have been spot on. I'll be looking forward for the next reports coming out during the week and see how your analysis holds up. I have a feeling APPL is going to be right too..

By the way, did you take a position on Nintendo last week? I was sure that the stock would flop further after they posted their results early in the week and I was right. Any idea I can learn how much it would be possible to earn if an option had been placed on July 22nd?

Also I know you requested not to post any email addresses on this topic, but if that's okay with you, I'd like to post mine for the NetFlix report so some kind user can send it to me. I really wanted to read it but I missed out because I came in late on the other thread. It's [email protected].

Thanks again and hope to see more in the next days!

gotchu

Thank you!

Here's something to help if you'd like to start exchanging future commodities.

may email you. Now that I have a strong grasp of options and quite a bit of virtual history behind me I feel confident with understanding futures is next up!

This graph indicates that Natural gas is overpriced and on the way back down. The matters of value associated with that are largely storage capacity and drilling activity I imagine. Pipeline structural capacity and refining or consumption as well? I'm not unfamiliar with validating the rigcounts etc.

I have about £2000 I can play with, what is the best way to try and get into trading even with low risk/low reward just to get a feel for it and have some real. actual practice and analysis and eying up trends. Also any more recommended reading material would be great as i have simply googled around and read blog posts thus far.

TWTR is a disaster. Depending on how it swings tomorrow, it could be an opportunity to close the gap on the 30M chart.

sweet sweet called it.

Yes. Natural Gas has been tanking for the past two years because Oil prices have been dropping, reducing energy costs. But the idea of the graphic is to show a monthly trend to understand when to buy and sell due to the demand and offer. You can see that during September it tends to rise because the market is adjusting for consumption over the autumn and winter and likely failing around June.

Other commodities tend to follow these rules like Oil, Wheat, Soy Beans, Corn, etc. Some others are tied to industries such as Platinum and Iron. Nevertheless, you should always research the commodity you're looking into but it's fairly easier to understand than stocks - in general.

I'm interested in this too but mostly for options. I haven't played with them so far and they seem far more interesting than CFDs because you can totally mess around them for hedging or multiple positions on volatility despite the fairly complex nature of it (options, that is).

Well I have been reading up and being a rather techy person I have taken an interest in apple stocks, its affordable at around $98 and currently dropping, with the iphone sales falling and macbook sales falling, but with them due to announce a new macbook range for release in Q4 this year, I am tempted to invest and see if they rise on any announcements and beginning of sales.

Could anyone give any advice on the above and think its a decent outlook?

Looks like Damon was absolutely right about APPL generating a lot of revenue from APP store. And about the long position, of course.

An interesting detail I noticed is that it appears that Apple is likely to lose some of it's market share in China to other cheaper smartphones. Being somewhat familiar with Huawei, does it sound like a solid bet for future earnings?

any memes op?

Can you post recommended stocks of the day type post regularly?

You know my name. Earnings plays are about predicting a beat/miss, predicting whether investors already expected such a beat/miss, and predicting future guidance issued by management. I have not looked at any of these for Huawei.

I'll do my best.

>TWTR is a disaster
It's cracking me up b/c I'm short.

Impressive result with AAPL.

I wouldn't mind more of these threads. Refreshing to see something other than endless coin schemes.

In response to OP's regard to Netflix

I've been trading Netflix this past month due to it's volatility. Do you believe today's sharp upturn in it's stock price was due to the mumblings coming from Apple in respect to rumors of making an offering to Netflix? I've been watching Apple's stock walk a rather stagnant road for the past couple of weeks and I can only see that to be a natural occurrence due to sales of each consecutive iPhone release showing no growth and not meeting projections. I was growing to fear that Apple was going to meet the position that IBM and Intel have taken, stable tech companies with stable stock price due to their oversaturation but consistent sales and institutionalized use. I also found Apple's stock to have jumped in after hours trading-- seeing that I heard news of this rumor in regards to them wishing to make an offer to Netflix this same day. Could there perhaps be something great coming in the upcoming months that should trigger us to buy into Apple as well?

Also, in conjuction to my original post. I take a rather odd position in seeing what to do with my Amazon stock. I feel I'd be better off just waiting until early November to sell due to upturns in sales for Christmas shopping and the like, as I haven't really been seeing any sales worth profiting over.

To people who invest for living

If I want to regularly invest in index, when is usually the best month to do so? I heard somewhere here that market usually go down in August.

Just do dollar cost averaging, so you don't need to worry to wait for the right moment.

Today was busy. I bought NUGT at market open and sold at close, after FOMC, for a gain of nearly 100%.

Also bought GOOG, WDC and ABX, as they report earnings overnight.

Depends on the index.

I played AMZN long last earnings. What you see in the image is a debit spread. This options strategy makes any stock playable, regardless of the cost, by reducing the need for capital for entry.

However, right now the stock looks too expensive for me. I'd wait on the sidelines. If you're looking for a company with growth in cloud, I'd suggest MSFT, as Azure is growing faster than AMZN's AWS.

NFLX is up on news of a big buyer. That's all.

I was excited when Veeky Forums was announced as a forum because I'm an avid reader of 2chan's economics board. However, Veeky Forums turned out to be 99% cryptocurrency-of-the-month, pennystock pump-and-dump, and the most boring, common, mundane, investment advice.

We should work toward fixing that.

Looks like FB beat on earnings. That was one of my weekly earnings recommendations for July. I advised my subscribers to buy at $114; it is $131 after hours.

Here is an excerpt from my earnings prediction in Exposing Earnings:

The analysts are awful at predicting FB's earnings. We can take advantage of this, assuming that FB actually reacts in stock price in the same direction of the earnings surprise. Does it?

Yes. Well, almost always. For example, last year's FQ2 was a beat, but many ditched the stock in spite of the strong fundamentals; expectations were just too high.

Nevertheless, FB reacts as predicted to a positive earnings surprise most of the time, making our play something like 80% likely to be right, which is much more than even the best investors can say. Moreover, FB will be posting a personal all-time high in EPS and revenue. Remember when Google did the same, surpassing Apple as the biggest company?

In sum, the EPS and revenue trend puts us in a good place: breaking new ground. That's why FB is more playable now than last quarter (and why I didn't post an article for last quarter). The options market is pricing in a $8 move.

I have a quick question. I'm only paper trading right now as I learn and I did a little earnings trade for FB and it looks like it's going to pay off nicely. But what I always wonder is how are the shares still trading after hours?

The earnings come out, then the stock shoots up (in this case) but how are they still being traded?

Most brokerages allow you to trade a couple hours after the market closes. The spreads are a bit wider, but it allows you to capitalize on earnings after they have been reported. It also allows for a pretty interesting options strategy that I've kept up my sleeve for a while but have yet to use.

Options do NOT trade after hours, FYI.

Ah ok interesting. Often wondered that.

Yeah my trade was an option trade. A debit spread or bull call with a far out of the money put to fund it a bit. So a super bull basically

Debit spreads cap your upside, so if you are "super" bullish on a stock, you should avoid them. Debit spreads bring benefits in hedging theta (time decay) and lowering the cost of the strategy.

Yeah you're exactly right. That's what I'm learning. And in fact if you're really really bullish then you want to buy the stock and sell puts as well.

But I'm not into gambling hard. I'm learning to keep it all under control. In fact normally I've been trying to avoid doing earnings trades altogether but I couldn't resist this.

Mostly I'm trying to stick to defined risk trades.

>And in fact if you're really really bullish then you want to buy the stock and sell puts as well.

I'm happy to hear you mention that. Few "learners" do. The strategy you mention is called a "synthetic" or "combo" and allows you to mimic stock almost perfectly. If you learn this strategy, you will never trade stock again.

You can also reduce your risk on a combo by buying a protective call/put, which also reduces your margin, by the way. You've got a great strategy on your hands.

Yep, I've still got a lot to learn but I'm going to keep learning for many years to come. Things are already starting to click nicely but I want to get more comfortable first and get really nice and mechanical before I start for real.

I also still need to save capital before I can get started. Not in a hurry right now anyway, just learning the trade and growing my awareness. I want to make all my big mistakes while I'm still paper trading.

Yes. I watched the video you posted on the other threat and I liked a lot how you structure your strategy around different variables to get a strong signal and decide if you should enter the market for a certain stock or skip it altogether (or so I think that's the idea).

Nice one. Hopefully you followed my advise and got out when that gap (from 26th or 27th of July opened up) closed up. 15% in a day is fucking awesome.

I don't understand why you bought NUGT at market open. Weren't you short on gold futures early this week? Or are you hedging just in case your prediction goes sideways?

Also could you explain what happens in that debit spread of the image you posted? How is it possible to get a 100% of ROI? Specific conditions, I presume?

If it's not much of an hassle, I'd like to know how I could learn what would have been the best way to trade options of NTDOY short (22/07) GILD short (22/07), APPL long (25/07).

Thanks a lot for informing Veeky Forums. Contributions like yours really make this board a lot more interesting. Also, and only if that's okay with you, I'd like to forward the NFLX letter to everyone else on the other threat.

>The strategy you mention is called a "synthetic" or "combo" and allows you to mimic stock almost perfectly. If you learn this strategy, you will never trade stock again.

I don't understand this. Are you going short and long at the same time? How is that supposed to work? Or rather, won't it only work when one of the sides provides a ROI of 100%?

>Hopefully you followed my advise and got out when that gap (from 26th or 27th of July opened up) closed up
Not sure which gap you're referring to.
26th or 27th of July? Yesterday?
And got out of what?

>We should work toward fixing that.

Hell, if it was only 80% inane nonsense, and 20% material discussion, it would be a massive improvement. Scrolling through the catalog feels like this is /b/ more than Veeky Forums. A depressing state of affairs.

Whether board culture changes or not, cheers to a conversation I can look forward to.

I explain the NUGT trade in this video:

youtube.com/watch?v=DKQAXAxs234

I swing trade the NUGT, so I close out my trade within 24 hours, meaning that I could be short on Monday but long on Wednesday.

The 100% ROI comes from a mere calculation: profit/investment

The debit spread in that image cost me $800 to open and was later sold for $1500, so that's almost 100% ROI.

There is no "best way to trade options." I recommend you brush up on option greeks and then start labeling options strategies in their greek terms.

If you use a synthetic or a combo, you're buying and selling options of the same strike and expiration at the same time. For example, a short combo, which is a long position, is buying a call and selling a put. This position mimics holding 100 shares of stock but can be performed at a net credit.

When you run a combo, talking about ROI becomes confusing because of the ability to open at a net credit. For example, if I pay you $100 to give you 100 shares of AAPL and then you later sell the 100 shares of AAPL for $10,000, what is your ROI? The equation would give you:

10000/-100

And that simply doesn't make sense. I think a better way to state ROI for such a strategy is to use margin in place of the net credit/debit.

Sorry, I meant to say June instead of July. It's pointed out in the chart. By getting out I mean closing your position by buying your short. I don't feel extremely confident that TWTR is likely to continue going down but a break on 15.70 S could signal that. If it pushes up it will probably attempt to slightly fill in the newly formed GAP.

Interesting but I'm surprised that you did not make a call and put option out on that. Perhaps it's because NUGT being an EFT(?) is less likely to play around filling GAPs but given your confidence that FOMC would keep rates unchanged and boost gold futures up (because of obvious reasons) why not try to play the short position to fill in the GAP from the presumed volatility before the announcement and then play the long position because of the official statement? Looking at the chart and giving it some thought it felt like a reasonable bet.

I'm still a bit confused how to play options properly but it seems like an interesting choice for hedging and combos. I'm definitely going to be looking it up but investopedia doesn't seem to offer a lot of information and practical examples (unless I missed something out). Any suggestions (books, articles, tutorials)? I'd like to get into virtual trading before jumping into money because there's nothing like actual experience but I'd also like some bases before starting.

And thanks a lot for the video, Damon! Really enjoyed hearing out more strategies (a bit less orthodox I guess) to pick up stocks before earnings. And it cracked me the hell up when you said:

"The more confident a person is, the more likely he is to be wrong.
Except for me I'm very confident but I'm... I'm actually quite perfect in many ways!"

Ok, I see what you mean.
You would have covered at $15.80 or so.
We'll see. That may turn out to have been the correct play.

Guys buy stock in Sirius XM

TastyTrade or Dough for strategic general and well researched explanations.

What are the bets for GOOG and AMZN today.

Every stock has its own characteristics in regard to gaps. I wrote an algorithm that can give trading strategies for each stock's gaps. TWTR here might just be a stock that doesn't work well with up gaps between two green candlesticks.

Also, if a gap doesn't fill within a certain amount of time, you might as well give up on it filling. The image you posted doesn't look like a gap filling - the stock ran away and then happened to fall, a phenomenon that cannot realistically be claimed as an area gap filling.

I recommend you pick up the International Handbook of Financial Terms as your reference book. It also has an impressive section on various options strategies.

NUGT is a 3x leveraged ETF and has its own idiosyncracities. I've been working with it for the past few weeks, trying to wrap my head around it. Long NUGT at the moment (was short from market open until noon, closed the position, and went long right before the market closed). I think if I can get a grip on NUGT, I don't really need to trade anything else - of course I cannot give up trading earnings, as I have a group of traders reliant on my earnings predictions.

On that note, our long position on GOOG killed it today. My options strategy caps profit at 800, though - but GOOG might not hit 800 tomorrow anyway.

I also bought WDC calls, and they beat on earnings too. I haven't made a single wrong trade this week, thankfully.

Shall we let this thread die?

No

Well guys, it has been fun. However, I do not think Veeky Forums is the right place for this type of discussion. The active topics are on concepts and investment tools that are not my thing.

If you want to connect with me to discuss earnings, you can find me on YouTube.

Peace.

BUMP