Big opportunities: CMTrading CEO Daniel Kibel on earnings season

Here’s how you can take advantage of the upcoming earnings season

12 October 2021 - 07:00
The earnings season presents huge opportunities for local traders hoping to take advantage of it.
The earnings season presents huge opportunities for local traders hoping to take advantage of it.
Image: Supplied/CMTrading

Microsoft, Amazon and Netflix are just some of the largest companies in the world releasing their earnings in October 2021, and many financial firms will be paying close attention. 

The earnings season presents huge opportunities for local traders hoping to take advantage of it. Earnings season is the period when publicly traded companies release their most recent quarter’s financial information. In short, if they beat analysts’ expectations, their stock price is likely to rise. 

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Here are some of the biggest companies releasing their earnings:

Netflix: October 19
Coca-Cola: October 27
Microsoft: October 27
Tesla: October 27
Amazon: October 28

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What does earnings season mean for you? 

Earnings season provides some transparency in an otherwise turbulent market. That’s because anyone, from professional fund managers to casual day traders, gets access to the same financial information at the same time. 

It’s important to recognise that earnings season can be volatile; share prices can experience major spikes in a single day of trading. The financials that companies report will reveal how healthy their finances are, and possible investments or growth strategies they plan to employ. 

CMTrading CEO Daniel Kibel shares his thoughts on the earnings season and highlights trends for SA traders.   

What is earnings season? 

“Earnings season is when companies announce how much they actually made as opposed to what’s expected. If Amazon is expecting revenue of $111bn and their actual results are $113bn, that’s much better for the company and its stock will rise because it’s a considerably better result than forecast. On the other hand, if it was to go below $110bn then that would be bad as its stock would drop.” 

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How can investors and traders take advantage of earnings season? 

“You need to understand what’s going on with specific companies and have a feeling of what’s happening around the market ahead and during an earnings release. Earnings can be affected by many factors, including harsh weather, and especially by the pandemic. If it’s Amazon, consider the millions of packages that have been ordered through its online shopping platform. If you’re looking at Apple, consider its new products and weigh up its sales vs supply disruption due to the pandemic.”

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What are the pros and cons of earnings season? 

“Earnings season presents big opportunities for traders through market volatility. It results in a lot of volume being traded, being an opportunity to make a lot of money. As with all investments, when volatility increases, potential rewards rise, but so does the risk.

“If you want to make money in stocks, now is the time to do so, as the earnings season is when major companies see their stocks really move in the market.”  

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Advice for traders? 

“Know what you’re getting yourselves into; don’t risk what you can’t afford. Understand that now is the time to trade. The financial world will be looking at company earnings and trading the earnings season is great as the market moves with high volatility.” 

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This article was paid for by CMTrading.