Home > Store > Finance & Investing > Investing
Trading on Corporate Earnings News: Profiting from Targeted, Short-Term Options Positions
- By John Shon, Ping Zhou
- Published Mar 9, 2011 by FT Press.
- Copyright 2011
- Dimensions: 5-3/8" x 8"
- Pages: 224
- Edition: 1st
- Book
- ISBN-10: 0-13-708492-7
- ISBN-13: 978-0-13-708492-0
Register your product to gain access to bonus material or receive a coupon.
Product Author Bios
John Shon, Ph.D. (NYC) is Professor in Accounting at Fordham University’s Graduate School of Business. His awards for research on equity markets include the Outstanding Research Award at the Global Conference on Business and Finance Research, and Most Innovative Conference Paper Award at the Four Schools Summer Research Conference. He holds a Ph.D. in Accounting and MBA in Finance from the University of Chicago.
Ping Zhou, Ph.D. (NYC), VP and equity portfolio manager of Neuberger Berman’s Quantitative Investment Group, is an expert in portfolio theory, market anomalies, investor behavior, corporate finance, and risk management.
Profit from earnings announcements, by taking targeted, short-term option positions explicitly timed to exploit them! Based on rigorous research and huge data sets, this book identifies the specific earnings-announcement trades most likely to yield profits, and teaches how to make these trades—in plain English, with real examples!
Trading on Corporate Earnings News is the first practical, hands-on guide to profiting from earnings announcements. Writing for investors and traders at all experience levels, the authors show how to take targeted, short-term option positions that are explicitly timed to exploit the information in companies’ quarterly earnings announcements. They first present powerful findings of cutting-edge studies that have examined market reactions to quarterly earnings announcements, regularities of earnings surprises, and option trading around corporate events. Drawing on enormous data sets, they identify the types of earnings-announcement trades most likely to yield profits, based on the predictable impacts of variables such as firm size, visibility, past performance, analyst coverage, forecast dispersion, volatility, and the impact of restructurings and acquisitions. Next, they provide real examples of individual stocks–and, in some cases, conduct large sample tests–to guide investors in taking advantage of these documented regularities. Finally, they discuss crucial nuances and pitfalls that can powerfully impact performance.
|
17 of 18 people found the following review helpful
Trading earnings with nondirectional option plays, By
This review is from: Trading on Corporate Earnings News: Profiting from Targeted, Short-Term Options Positions (Hardcover)
Customer review from the Amazon Vine™ Program (What's this?)
Traders who want to cash in on the huge swings that growth stocks have after earnings are announced will find this book very informative and interesting. The authors show through statistics and empirical data how traders can make money in option plays that are held through a company's earning announcement.Half of the earnings announcements made by companies have market returns that are 30 times as large as a typical non-announcement day. These kind of moves make volatility driven option strategies successful many times. The research shows that companies that have surprised the market with better than expected earnings will continue to do so. The research also shows that it is very difficult to predict how the market will react to good or bad surprise earnings. Sometimes it sells the news even when it is good and sometimes it goes up on bad news, the complexity of the reports also come into play where revenue is not what the market wanted so it sales off even though the... Read more
24 of 29 people found the following review helpful
Useless,
This review is from: Trading on Corporate Earnings News: Profiting from Targeted, Short-Term Options Positions (Hardcover)
Save yourself the time and money, here's the meat of the entire book;It's very difficult to predict earnings, and even if you could, its just as difficult to predict the markets reaction to those earnings. So buy a straddle or strangle just before the market close the day before the earnings annoucement, then dump the position before the market closes the day of the actual earnings announcement. That's it! That's essentially the entire book! The authors like true accedmic types present wads of supporting studies to back up their claim that its difficult to predict both earnings and the subsequent market reaction to those earnings, but they fail in providing a trading plan that's been shown to make money over time. To be fair, the authors give guidelines for which options (those with small bid/ask spreads) or which types of stocks should be used in executing this plan, but outside of a small set of guidelines, the "plan" is largely to just blindly buy a straddle... Read more
15 of 18 people found the following review helpful
To-the-point discussion of option strategies for earnings announcements, By
This review is from: Trading on Corporate Earnings News: Profiting from Targeted, Short-Term Options Positions (Hardcover)
Customer review from the Amazon Vine™ Program (What's this?)
In a sense, if you already know about straddles and strangles, one could be forgiven to think that the book doesn't offer anything new. If all you are looking for a "new" trading strategy, this book will disappoint. However, this short, easy-to-read book should be mostly viewed as understanding the dynamics of earnings announcements - right from what is included in earnings report and which numbers matter (and why) to post earnings drifts and specific strategies trade around such events.A recent article in a leading financial weekly cited a research firm that over 75% of the straddles/strangles lost money in the ongoing earnings season (Jan-Feb 2011) - mostly attributed to the collapse of the implied volatility (the authors do explain this phenomenon very well). As such there is obviously no guaranteed results - but this book provides almost everything a trader would want to develop a comprehensive checklist in entering into trades around earnings (in fact, this strategy... Read more |
Online Sample Chapter
Preface to Trading on Corporate Earnings News: Profiting from Targeted, Short-Term Options Positions
Table of Contents
Acknowledgments xii
About the Authors xiii
Preface xiv
PART I: INTRODUCTION
Chapter 1: Introduction 3
PART II: THEORY: EARNINGS ANNOUNCEMENTS AND EARNINGS SURPRISES
Chapter 2: Earnings Announcements: Why Are They So Important? 13
Chapter 3: Earnings Surprises: Definition and Measurement 23
Chapter 4: Earnings Surprises: Empirical Evidence 39
PART III: EVIDENCE: MARKET REACTIONS
Chapter 5: Market Reactions to Earnings Announcements 49
Chapter 6: Market Reactions to Earnings Surprises (Are Full of Surprises) 57
PART IV: IMPLEMENTATION: OPTIONS TRADING STRATEGIES
Chapter 7: General Characteristics of Optioned Companies and Options Behavior Around Earnings Announcements 71
Chapter 8: Practical Considerations Before Implementing Trades 77
Chapter 9: Directional Bets: Long Calls, Bull Call Spreads, Long Puts, and Bear Put Spreads 97
Chapter 10: Long Straddle and Strangle Strategies 111
Chapter 11: Short Straddle and Strangle Strategies 135
PART V: FINE TUNING: IMPROVING THE ODDS OF A PROFITABLE TRADE
Chapter 12: Growth Expectations and the Torpedo Effect 153
Chapter 13: Revenue and Expense Surprises 161
Chapter 14: Earnings Surprise Persistence 167
Chapter 15: Other Theories and Evidence 175
References 189
Index 197
Sample Pages
Download the sample pages (includes Preface and Index)
This book includes free shipping!
This book includes free shipping!
eBook (Watermarked)
$34.99
$27.99
Includes EPUB, MOBI, and PDF
About eBook Formats
This eBook includes the following formats, accessible from your Account page after purchase:
EPUBThe open industry format known for its reflowable content and usability on supported mobile devices.
MOBIThe eBook format compatible with the Amazon Kindle and Amazon Kindle applications.
PDFThe popular standard, used most often with the free Adobe® Reader® software.
This eBook requires no passwords or activation to read. We customize your eBook by discretely watermarking it with your name, making it uniquely yours.
- Request an Instructor or Media review copy.
- Corporate, Academic, and Employee Purchases
- International Buying Options
Get access to thousands of books and training videos about technology, professional development and digital media from more than 40 leading publishers, including Addison-Wesley, Prentice Hall, Cisco Press, IBM Press, O'Reilly Media, Wrox, Apress, and many more. If you continue your subscription after your 30-day trial, you can receive 30% off a monthly subscription to the Safari Library for up to 12 months. That's a total savings of $199.
