To The Moon

Earnings season is here.

Earnings is like hunting season. 

Lots of animals running around. 

How does hunters catch prey anyway?

1. Set traps for the animal to run into

2. Shoot when the animal is resting/immobile 

Let's translation it into investing:

How to hunt stocks during earnings?

[Thinking] ever see hunters carry their Big guns and chasing after animals? 

Somehow, I can't picture that Image.

But when we buy stocks to anticipate earnings. We are doing exactly that. 

We are chasing the animal in a single direction, and Hope to somehow hit it. We may getlucky and hit the animal. But guess it's exhausting and unreliable. The animal can alwaysturn around and change direction. 

Stocks are extremely volatile during earnings, and go all over the place. It's tough to anticipate. Directional options strategy have thesame problem. 

How about we set traps all around the animal Instead? [Thinking] do we have the moneyto put so many traps for 100% chance of success? It may cost even more than buying the animal directly from open market.

Let's translate this into stock context:

There are non directional strategies that we can use. Option Strategies like straddles and strangles, are non directional and cover both positions. in a sense, trapping and cornering the animal. But there's still a problem, straddles and strangles are expensive to execute. The returns may not cover the costs. 

[Sweats] somehow seems to have no easy way to hunt the animal.

Still seems to be the easiest to hunt the animal when it's not moving.

In short, avoid earnings season especially if we do not have sound strategy to catch the animals. May end up either wasting resources or wasting time. 

In general, it's better and safer to hunt stocks when the prices are more stable And we have better clarity to take a clear shot. 

Happy hunting to all