Earnings season is upon us.
Next Friday we kick off earnings season with announcements on J.P Morgan and Wells Fargo . . .
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Overnight Trader: How To Turn $5,000 into $68,978.
. . . and I fully expect to take to take advantage by making trades in both stocks.
Over the past 15 months or six earnings seasons, I have been making one-day trades around specific earnings announcements from companies such as J.P. Morgan, Wells Fargo, Microsoft, Wal-Mart and numerous other blue-chip stocks. So far, so good.
The results have been even better than I originally anticipated.
Since Nov. 1, 2017, subscribers are up 597.8%. Our win ratio is 81.5% (44 out of 55 winning trades) since we initiated the strategy.
Best of all, the strategy is only in the market one out of every eight days on average so exposure to ongoing market risk is limited. So, geopolitical risks such as trade wars are never a factor.
The basis of the strategy is simple.
I take advantage of known factors that occur prior to earnings announcements. These are factors that occur every earnings season and are completely predictable.
Just look at the three charts below for Netflix, Amazon and Walmart. You will notice a common occurrence highlighted in red.
The common occurrence: an increase in volatility that builds leading up to earnings, followed by a dramatic drop immediately after earnings are released.
Again, we have been taking advantage of this little-known occurrence for 15 months now with great success.
We place a trade when volatility is high (and receive more premium or income as a result) . . . and then exit the trade after earnings are announced when volatility plummets.
Of course, there are other factors that come into play as well. Trading successfully isn’t this easy.
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Next Thursday I will be discussing in great detail how I make these one-day trades around earnings. I will show you the step-by-step process, so you have the opportunity to make the same trades with similar results.
I hope to see you all there.