Earnings season officially kicks on Friday off with big banks such JP Morgan (JPM), Citigroup Inc.(C) and Wells Fargo (WFC), and then tech will start to join the parade with Netflix (NFLX) reporting after the close on Monday.
For some active traders, these jolts of information and the accompanying stock price movement, represent terrific short-term money-making opportunities. And many will try to juice the returns by using options.
Before getting to some of the concepts and strategies that can be employed in playing earnings reports, let me provide the caveat that all earnings plays are extremely speculative and should only involve a minimal allocation of risk capital. The challenge trading earnings is that there are many variables that need to be accounted for and correctly forecasted.
Not only must you…
Continue reading at StockNews.com