Articles
Earnings Release
If we trade stocks, it is very important to know the Fix Events that could affect to our stocks, specially if we have a trade working, due to the results of those events could have a big impact on the price of the stock.
If we know these Events, we will able to do three different actions:
1. To protect our investment in case of event result is worse than expected.
2. To apply strategies to get benefits of a stock movement in any direction, through Straddles or Strangles.
3. To apply strategies once the event has been released and trade according to the event result.
The more important Event is the Earning Release, every 3 months, where companies shows to the public their Business Results.
For example, another important event is the FDA updatings/approvals, mainly in the pharmaceutical sector, where this institution approves or rejects licences for products, medicines, etc.
In next picture, we can see a big gap on Star Scientific (STSI) after a conflict resolution with another company (Reynolds American). This example shows how important is to hedge our investment when important decisions are coming.
Tags: options | education
