Earnings Season is Upon Us

Earnings season always tells the truth for a company, but its stock performance post earnings does not always reflect what earnings says. Every quarter, companies announce their earnings of their previous quarters with revenue, expenses, etc. Wall Street puts expectations on the earnings reports for companies, and if they beat these expectations it can REALLY drive the price up, or if they don’t even reach expectations it can REALLY drive the stock down. With the uncertain times of covid-19, I would not recommend even playing earnings at all. But, if you so choose to, I would suggest getting a call option and a put option that you view as a big mover. As long as the stock moves really hard in one direction, you will make a profit, but sacrifice the money you put up in the other option. If the move is large enough, it’ll pay out and you won’t have to be too worried trying to figure out if the stock will go up or down. Many major companies will be announcing earnings in the next trading days, including Netflix (NFLX) Thursday afternoon. The bull run it has experienced as people have sat at home during quarantine could mean very large moves for the streaming giant these next couple days, as its stock usually responds well when its subscriber count increases. Wall Street expects that Netflix added a little over 8 million subscribers this quarter, time shall tell!

-Darnel Shillingford

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