Pimp My Trade

Why Earnings Season Sucks

Posted on January 26, 2009 by Adam

I was long February 50 puts for DHR, anticipating a breakdown from a small head and shoulders pattern. Everything is working fine until this morning. I boot up my trading platform and surprise: big earnings announcement! DHR is now up 9% and by options are worth $0.60.

Let this be a lesson: don’t trade around earnings announcements. Be sure to check that earnings are not coming up (I didn’t) before you take a trade. Earnings kill technical setups.