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>I bet most people could review that data before the earnings call and guess the movement of the stock enough to make money. If "most people" could do this, "m

>I bet most people could review that data before the earnings call and guess the movement of the stock enough to make money. If "most people" could do this, "most people" would.

vineyardmike 5y ago
Apple is one of the most popular stocks, and one of the biggest companies. After a quick search i found this [1] quote. I bet if you asked most people "will apples stock go up tomorrow? its expected they sold a lot of iPhones" most people would say yes, and if you said "will apples stock go up tomorrow? its expected they sold less than expected numnber of iPhones" then they would say no I think the issue is not that most people can't "guess" the outcome, its that they can't afford (in the short term) the money to invest. Many people take years into their career before they can significantly invest and save money. Especially true for people who can afford the risk of options trading, which is more risky than "buy and hold" investing. The article in question mentions netflix engineers who make large 6 figure salaries. They could probably afford to make well educated bets on many other stocks and profit handsomely after several years. > Birinyi Associates studied Apple’s post-earnings stock behavior since 2009. It found Apple stock has gapped up, or shot higher 65 percent of the time in after-hours trading, right after its earnings report, with an average pop of 4.7 percent. On the next day, whether it gapped up or down, it has traded lower 65 percent of the time for a 0.92 percent decline. [1] https://www.cnbc.com/2018/05/01/heres-how-apples-stock-usually-behaves-after-earnings.html https://www.cnbc.com/2018/05/01/heres-how-apples-stock-usual...
- rurp 5y ago
  The math isn't exactly hard on this. A person who can reliably make double digit returns monthly or quarterly could literally start with $100 and become rich.
  - vineyardmike 5y ago
    > start with $100 and become rich Practically speaking, this isn't that easy. Most people don't have hundreds lying around to invest, especially not in risky trades. Also, options (what is being discussed) are often a lot more than $100 - Eg. Opening Robinhood rn shows me AAPL options around 150 whhile GOOGL options are 2k+ while AMZN is 3k+. Even if someone is very confident in a stock movement (and realistically, its obviously not guaranteed), thats a lot of money for the average person, especially when they could lose it. You have to be somewhhat well-off to stomach multi-thousand dollar losses - especially at the start. (also earnings are 1 per quarter)
    - tedunangst 5y ago
      Uhm, strike prices are not option prices.
      - vineyardmike 5y ago
        Ooops yes. Read to quickly. Options prices are still often out of price range of common people, especially considering the risk.

>I bet most people could review that data before the earnings call and guess the movement of the stock enough to make money. If "most people" could do this, "most people" would.

vineyardmike 5y ago

Apple is one of the most popular stocks, and one of the biggest companies. After a quick search i found this [1] quote. I bet if you asked most people "will apples stock go up tomorrow? its expected they sold a lot of iPhones" most people would say yes, and if you said "will apples stock go up tomorrow? its expected they sold less than expected numnber of iPhones" then they would say no I think the issue is not that most people can't "guess" the outcome, its that they can't afford (in the short term) the money to invest. Many people take years into their career before they can significantly invest and save money. Especially true for people who can afford the risk of options trading, which is more risky than "buy and hold" investing. The article in question mentions netflix engineers who make large 6 figure salaries. They could probably afford to make well educated bets on many other stocks and profit handsomely after several years. > Birinyi Associates studied Apple’s post-earnings stock behavior since 2009. It found Apple stock has gapped up, or shot higher 65 percent of the time in after-hours trading, right after its earnings report, with an average pop of 4.7 percent. On the next day, whether it gapped up or down, it has traded lower 65 percent of the time for a 0.92 percent decline. [1] https://www.cnbc.com/2018/05/01/heres-how-apples-stock-usually-behaves-after-earnings.html https://www.cnbc.com/2018/05/01/heres-how-apples-stock-usual...

rurp 5y ago
The math isn't exactly hard on this. A person who can reliably make double digit returns monthly or quarterly could literally start with $100 and become rich.
- vineyardmike 5y ago
  > start with $100 and become rich Practically speaking, this isn't that easy. Most people don't have hundreds lying around to invest, especially not in risky trades. Also, options (what is being discussed) are often a lot more than $100 - Eg. Opening Robinhood rn shows me AAPL options around 150 whhile GOOGL options are 2k+ while AMZN is 3k+. Even if someone is very confident in a stock movement (and realistically, its obviously not guaranteed), thats a lot of money for the average person, especially when they could lose it. You have to be somewhhat well-off to stomach multi-thousand dollar losses - especially at the start. (also earnings are 1 per quarter)
  - tedunangst 5y ago
    Uhm, strike prices are not option prices.
    - vineyardmike 5y ago
      Ooops yes. Read to quickly. Options prices are still often out of price range of common people, especially considering the risk.