So what does? The price charts. To beat the institutions doesn't require us to be brain surgeons it just requires us to think like they do. Most banks and funds tend to build positions ahead of a stock earnings event whether it's with calls or shares, or even both. The 'smart-money' is not waiting until the day of for the news then making the trade, no, they anticipate it. This is how Professional traders go about structuring their portfolios. So as we approach earnings season I've already begun my trades for something we call "Pre-Earnings" trade strategy that we teach in the Advanced Options Course.
At the time of writing this I am still in the trade which looked like this:
Bought 50 ASML JAN 18 180 STRIKE CALLS for $3.25
Total Trade Cost: $16,250
I've sold some so far as the price has increased and will likely keep some as we approach the earnings event - In fact, I'll have a video covering the trade once completed. The idea here is that we want to be forward looking on these earnings events. Now, if you're reading this and you've been told to 'never hold into earnings' odds are you are coming from the day trading world where most trade stocks sub $20 on margin. So sure, in some sense that makes sense but using a levered product like call options it's almost a must to hold (runners as we call them) a few into or through the event.
Holding runners and structuring a trade pre-earnings is what allowed me to make $30,000 on Amazon last year and $20,000 on the stock AVGO. So when you hear us talk about 3 Bucket Investing on the weekly radio show this strategy would fall into Bucket 3: Speculative. Sure, it's a small risk but we're after a large gain and it's part of a full portfolio management strategy that students apply in the Landshark Education Programs.
I hope this article helped.