Earnings season, explained.
Companies report their results a few times a year. Prices can move fast when they do. Here is what to know before you trade through it.
Earnings in four facts.
Most listed companies report every quarter
Prices can jump between close and open
Spreads often widen around results
You never own the shares
What is an earnings report?
An earnings report is a company’s update on how it did over the last few months. It shows how much it sold, what it earned and what it expects next. Traders compare these numbers with what the market expected. The gap between the two is what moves the price.
- Revenue: total sales in the period
- Profit and earnings per share (EPS): what is left after costs
- Guidance: what the company expects for the next period
- Expectations: the analyst average the numbers are judged against
Know when results land.
An earnings calendar lists who reports and when. Check it before you hold a position. The layout below is an example only: the names, dates and figures are not real.
| Company | Timing | Date | Estimate | Status |
|---|---|---|---|---|
| Company A | Before the open | Example date | Example estimate | Example |
| Company B | After the close | Example date | Example estimate | Example |
| Company C | Before the open | Example date | Example estimate | Example |
| Company D | After the close | Example date | Example estimate | Example |
Example layout only. Your platform’s calendar shows the real list. See trading hours and key events for the wider schedule.
How prices react.
The market prices in what it expects before the report. So the news that matters is the surprise. A good result can still send a price down if traders hoped for more. A weak result can lift it if the fear was worse.
- Gaps: the price can open far from where it closed
- Wider spreads: the cost of entering and exiting can rise
- After-hours moves: reports often come when the exchange is closed
- Beat but fall: strong numbers, weak guidance, lower price
- Index effect: a big company’s result can move its whole index
How to prepare.
Check the calendar
Look up the report date for any share or index you hold.
Reduce your size
A smaller position limits the damage from a sudden gap.
Plan for gaps
A stop-loss is not guaranteed. In a gap, it can fill at a worse price.
Check dividends
Share CFDs on dividend dates can get a cash adjustment, up or down.
Before, during and after.
A simple routine you can reuse each season.
Before
Find the report date. Decide your size and your exit. Read the news and analysis.
During
Expect fast moves and wider spreads. Avoid chasing the first jump.
After
Review the result against what was expected. Look at the guidance. Reassess your plan.
What can go wrong.
Earnings days are among the riskiest for a share position. Leverage makes small price moves bigger, in both directions. You can lose more than you planned in a few seconds.
- Gap risk: stops may not fill at your price
- Leverage: losses grow as fast as gains
- Liquidity: wide spreads and thin order books
- Overnight financing may apply while you hold
Related guides.
Earnings, answered.
Risk warning. Forex and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Make sure you understand how they work and whether you can afford the high risk of losing your money.
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