Stephen Cooper

Earnings 12/14

nicholasbellono said: "Hi, I just joined and thought I would post. After the fed release, markets should rebound tomorrow. I thought I would mention some good calls to possible get in on. This thursday is a big day for earnings. Some to watch: CIEN is estimated to release .13, a 208% jump over last year's report of -.14 VSTA - .03 compared to -.031 last year. ZQK- .51 compared to .27 BECN- has had a steady incline- showings earning of .33 compared to .25 ASFI- .78 compared to .68 Any thoughts?"

drdan said: "Sure - playing earnings is like gambling. :jump: I don't like the risk in comparison to the reward."

nicholasbellono said: "Dr.dan Not if you do right. I'll bet they go up. Watch CIEN it is 24.74 at close. The 22.50 strike is at 2.45 right now. I caught GEF before earnings last week from around 98 dollars and it is up at around 115 I believe as of close. So far researching companies with up-comming earnings and big announcements seem to be working well for me, what are you doing?"

Hanger said: "I have done absolutely no research before making these comments: CIEN with a 208% turnaround from -14 to +13. Sure they probably had some big expenses that set their year last year wrong, but...to me, this is just screaming coming in under estimates. But as I will always do, good luck with your earnings play-they can be rewarding or failures...hopefully yours goes the right way for you.."

drdan said: "Nick (can I call you Nick:) ) I have played earnings before and I have done it correctly and I have made some phenomenal gains; however, I have been burned way too many times as well. I personally like consistency. I find consistency in writing options as in credit spreads and when I move my capital up to have a larger amount to play with then I will be selling puts. The problem with earnings is that you can be dead right on with your estimate of what the earnings are going to be and still lose. All that has to happen is the CEO or the CFO or some spokesperson for the company make a comment about the future of the company not being as good as was thought and the entire trade is blown. Also many times investors are in it for the run up to earnings and then sell on the news and you are still in the toilet. Too much of a gamble. The best way to play earnings, in my opinion, is to buy on low volatility a couple weeks before earnings and then sell on high volatility the day before the announcement. OR playing earnings during this week - expiration week so that you are only playing with volatility and intrinsic value because all the time is gone. How long have you been playing earnings?"

drdan said: "[QUOTE=nicholasbellono]Dr.dan Not if you do right. I'll bet they go up. [/QUOTE] Sorry missed this the first time - look what you just wrote there! I am not a betting man I am a consistent technical conservative trader and want to be for a long long time."

Mr. Gekko said: "I like Cramer's method on playing earnings. Put half your position on before the release date. If the stock tanks put the other half on. If the stock ramps then you didn't make as much money as you could have (high quality problem). Of course, he suggests doing this with "best of breed" stocks... which these aren't."

nicholasbellono said: "I like that Gekko. That is a great idea. Obviously, I'm new at this. I started in a little while ago and so far I've just been playing the earnings and I have made very high percent gains on almost every one. Maybe I've been lucky. But that is why I am here is to learn from trader's with more experience than I have. What types of profitable strategies do you guys use?"

holzie said: "[QUOTE=drdan]Nick (can I call you Nick:) ) I have played earnings before and I have done it correctly and I have made some phenomenal gains; however, I have been burned way too many times as well. I personally like consistency. I find consistency in writing options as in credit spreads and when I move my capital up to have a larger amount to play with then I will be selling puts. The problem with earnings is that you can be dead right on with your estimate of what the earnings are going to be and still lose. All that has to happen is the CEO or the CFO or some spokesperson for the company make a comment about the future of the company not being as good as was thought and the entire trade is blown. Also many times investors are in it for the run up to earnings and then sell on the news and you are still in the toilet. Too much of a gamble. The best way to play earnings, in my opinion, is to buy on low volatility a couple weeks before earnings and then sell on high volatility the day before the announcement. OR playing earnings during this week - expiration week so that you are only playing with volatility and intrinsic value because all the time is gone. How long have you been playing earnings?[/QUOTE] Dr.Dan, long time no see, my friend. I've been so busy with school....no time for forums. I also hate that so many posts were deleted, otherwise Nick wouldn't have to ask these questions :) Bottom line, Nick, I have been exactly in your shoes a year ago...and I was so excited about earnings trades. I made $10,000 and lost $13,000. net is negative $3000. I started with a $3,500 acount btw. Very expensive tuition. You will soon learn that predicting direction is less than half the game, which means that your probability of consistency is very slim in the long run. And that's what this game is about. I learned my lesson and now I do exactly what Dr.Dan does. I like iron condors and vertical spreads, with very high probability of success. Yes, this does mean that you pay for high probability with lower return but I would rather have an iron condor on with 2 standard deviations away from strikes and 15% profit potential, than a Apple earnings call...any day. But this is just one style of trading options. It works for me, very well, nothing wild...so why change it. Another lesson I learned was choosing the right broker. I was with Optionsxpress and their commission structure make it almost impossible to trade many very small trades. I switched to ThinkOrSwim and any small size trade makes sense now. To give you an idea, I paid $51.80 for an SPY iron condor (4 options, 4 legs), while with TOS I make the same trade for $6.00..($1.50 per contract). Big difference, especially if you are gunning to receive $50 credit on a $120 risk spread.....you couldn't do it with OX. My 2 cents. Good luck my friend, you will need it. Holz."

tony5147 said: "Hi Nicholas : I do trade options based on earnings, where there's a possibility of high percentage profit if I "guessed" the gapping direction of the stock correctly after earnings announcement & guidance. Of coz, the options might lose most of their premium if the stock gapped in the wrong direction that I've anticipated. You could still lose money if you bought options at too high implied volatility even though the stock gapped in the correct direction as anticipated. I still trade options based on earnings gapping analysis but I would only enter a trade if my research, both technical & fundamental, would yield me a higher probability of success. I also stick to strict money management and would commit about 5-10% max. of my capital for every option trade."

Hanger said: "Nicholas- Good play on CIEN, congrats......ride em while they are hot....."

nicholasbellono said: "Thank you, Apparantly I knew a little bit what I was talking about not just that earning went up from last year to this year. Cool! However, I am interested in learning about these iron condors and vertical spreads you guys are talking about. Where can I find information about these things? -Also, I am a member of tradeking (.65 a contract) and I've made serveral hundred percent so far but I would like to learn more safe strategies in case, such as Holzie was saying. Thanks so much guys!:th_dblthumb2:"

holzie said: "Dr.Dan has a website/blog...good place to start. That's where I first ran into them a year ago. Learning how to trade them conservatively might be a good way for you to make a safe 5-15% a month.....of course, even with spreads, you can swing for the fences....but why? Theta does all the work for you :) Holz."