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Keep A Watchful Eye On Earnings Release Dates

In the words of the estimable Dr. Seuss, “Oh the thinks you can think up if only you try.”  No doubt, putting that concept into practice before the market opened today could have been particularly profitable for those who went long on Netflix (NFLX) or short on Apple (AAPL).  Before you dismiss the utter foolishness of this notion, a little introspection is in order.  Did you know in advance when the earnings reports for both stocks were due to be released?  Not coincidentally, both stocks released earnings after the market closed yesterday.   This is not to say one could have necessarily predicted the direction these stocks would have moved, but at least knowing the earnings release date provided one the opportunity to speculate or hedge.

Let’s take Apple.  The stock has been incredibly volatile for some time.  If you own a position in what until recently has been the consummate Wall Street darling, buying a protective put before today would have been a relatively inexpensive insurance policy.  Given the risks of shorting the stock if we guessed wrong on its post-earnings release direction, speculators could also have bought a naked put to leverage the potential to profit from a steep decline due to an earnings disappointment.

For those of you with smart phones or tablets and a desire to easily track the earnings release dates for stocks in your portfolio, one of my favorite apps is Stock Earnings by Chris Davis.  You can use this app to schedule email alerts that notify you on various days before the actual release date.  Check it out.  ExitPoint also provides one-click access to Yahoo’s earnings release calendar.  From any external page on the website, simply click on the “Market Updates” bar and select “Earnings Announcements.”

Given the importance of earnings announcements to a stock’s price movement, it’s fair to say that those who keep informed will be best positioned to take advantage of another Dr. Seuss adage.  “Don’t cry because it’s over.  Smile because it happened.”