Wow. SNDK lost 20% today. Geez. They really punished that stock. I thought I was upset AMD went down 2 points from where I purchased it. I'd go crazy with the amount of shares I buy if that happened to me. Usually, I try to get out of stocks before earnings. However, I thought AMD would do fine. It will be back up next week, but shorted it for the earnings anyway. Did the same to INTC and YHOO. SNDK though may be a buy point in a few days. :/ You live and learn. I am sure something like this has happened to all of us one time or another.
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I learned a VERY important lesson
- Thread starter cashmoney69
- Start date
Quote from Arnie:
Taking a position in any stock prior to earnings is gambling....not trading.
I totally disagree with that statement. If you know the company and what it does and have any idea of the demand for the products or services it sells then you would be missing some great opportunities. If you don't have a clue and are just looking at a chart, then yes, it is gambling unless the stock has been hit so hard there is little probability it can be hurt worse. Again, you have to know the company. You have to know how it typically guides the street. Many many times you can get an idea if a company is going to do ok just by listening to conference calls in similar sectors or vertical sectors.
Wouldn't one want to play earnings with some sort of ratio backspread strategy? It seems like buying or shorting a stock around earnings is just pure gambling.
Quote from BCE:
The thing about earnings too is that good news may already be priced into the runup as is being said but even if it's not the bump up usually isn't that great, depending on the stock. But if earnings are missed there's usually much more of a downside risk. 30% loss or more is actually not that unusual. Going long during earinngs is very risky. Remember RM made $500k in one day shorting a stock and selling naked puts right before earnings. It tanked. I lost $10k in a couple of hours during a trading halt on a surprise earnings miss announcement by EMC on July 5, 2001. Tanked about 30%. Nothing I could do. Sorry for your loss but you're taking it very well which is actually more important than the loss. Of course preserving capital is most important, but losing a few hundred when you're starting can be a very good lesson. And asking more experienced traders what they think is also good. You'll get it back but don't force getting it back.
Hey cash - if nothing else, remember this quote "Sometimes you have to go backwards to go forwards".
Very true in trading and it looks like this was an important lesson to help you go forwards even if temporarily going backwards.
Very true in trading and it looks like this was an important lesson to help you go forwards even if temporarily going backwards.
Quote from Arnie:
Taking a position in any stock prior to earnings is gambling....not trading.
Yes, I would agree that is very risky. I don't do that though..I wait for the market to make its move, then I jump... unfortunately for me, I jumped in front of a train on my last trade.
Volume seems to be the key factor when trading gaps. Today FLSH fell like a stone, but LOGI managed to hold at - .54 in todays trading, because of its strong volume from yesterday.
http://stockcharts.com/h-sc/ui?s=LOGI&p=D&b=5&g=0&id=p64038442953
So cash, you didn't know FLSH had earnings today? (thru SNDK)
Quote from cashmoney69:
Yes, I would agree that is very risky. I don't do that though..I wait for the market to make its move, then I jump... unfortunately for me, I jumped in front of a train on my last trade.
Volume seems to be the key factor when trading gaps. Today FLSH fell like a stone, but LOGI managed to hold at - .54 in todays trading, because of its strong volume from yesterday.
http://stockcharts.com/h-sc/ui?s=LOGI&p=D&b=5&g=0&id=p64038442953
Sadly, no. When I was scanning for gap plays I found FLSH, and blindly assumed that the reason for the gap was a better than expected earnings report, not knowing sndk had anything to do with them. :eek:
[ note to self ] --> Check each stock for its "parent" company reporting, if any.
cm69
[ note to self ] --> Check each stock for its "parent" company reporting, if any.
cm69
Quote from cashmoney69:
Sadly, no. When I was scanning for gap plays I found FLSH, and blindly assumed that the reason for the gap was a better than expected earnings report, not knowing sndk had anything to do with them. :eek:
[ note to self ] --> Check each stock for its "parent" company reporting, if any.
cm69
buy options, reduces your risk exposure significantly.
Quote from cashmoney69:
Well this morning I lost over 710.00 in one second, which is my single biggest loss to date.
I feel numb...for lack of a better word. I never lost so much money so fast lol.
BUT I learned a lesson, and that is, if there is no volume to support a huge gap...for god sake, dont buy!. I had this feeling something wasn't right when i looked at the daily chart for FLSH...Even on the day of the gap, there was no volume, yet I bought anyway ignoring what the chart was telling me.
Now at the time of this writing, FLSH is down 9.35 a share.
Live and learn.
cm69
This is one of the reasons why i left stocks and went into eminis..... gaps behave diffrently in futures mkt than they do in stocks.