Topic
Earnings
Four times a year each company reports, and the stock can reprice overnight. Calendars, guidance, estimate revisions and the size of the gap you can afford to hold through.
An earnings report compares what happened with what was expected, and the price reaction is mostly about the second part. Guidance, revisions to analyst estimates and pre-announcements all move the expectation before and after the report itself.
Start with the calendar and your own holdings, then size any position you hold through a report by the gap it could take, which the earnings gap loss calculator puts in dollars.
Viewpoints
All viewpoints →-
By the numbers
Holding a Stock Through Earnings? Size It by the GapThrough an earnings report, the gap sets the loss and the stop does not, so size the position from the loss you accept on a large gap.
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The case
The Strong Dollar Impact on Earnings Shows Up in GuidanceA strong dollar cuts real reported dollars from foreign sales, and the guidance built on those rates matters more than the headline beat.
Walkthroughs
All walkthroughs →Dictionary
Full dictionary →- Earnings estimate revisions
Changes analysts make to their earnings per share forecasts for a company over time, usually shown as the consensus now against its level 30, 60 and 90 days earlier.
- Earnings gap
The difference between a stock's last closing price before an earnings report and its opening price after the report, shown on a chart as empty space between two bars.
- Earnings pre-announcement
A company's release of preliminary quarterly results or revised guidance before its scheduled earnings report, usually because results will differ materially from what it previously told investors.
Courses, practice and tools
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Free course · Intermediate
Beat, Raise and Still Drop: An Earnings Reaction CourseTraders and investors who hold stocks through quarterly reports and want to understand why the reaction so often disagrees with the headline.
Lessons with a quiz at the end of each
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Quiz · Intermediate
What Mattered in That Quarter? An Earnings Report QuizWhether you can find the line in an earnings release that explains the price reaction, past a headline beat or miss.
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Calculator
Earnings Gap Loss CalculatorWhat an overnight gap of 5%, 10% or 20% does to a position, in dollars and as a share of your account.