RESULT
TCS 16-Apr-20
HDFCBANK 18-Apr-20
TATAELXSI 20-Apr-20
INFY 20-Apr-20
ACC 21-Apr-20
Every quarter, Indian.
companies announce their latest earnings and sales results. Sometimes, this
information is entirely in line with expectations and the market basically
shrugs its collective shoulders. At other times, however, a company unleashes
an earnings surprise, and the stock market reacts in a decisive fashion.
Sometimes, the reported results are much better than expected - a positive
earnings surprise - and the stock reacts by advancing sharply in a very short
period of time to bring the price of the stock back in line with its new and
improved status. Likewise, if a company announces earnings and/or sales that
are far worse than anticipated - a negative earnings surprise - this can result
in a sharp, sudden decline in the price of the stock, as investors dump the
shares in order to avoid holding onto a company now perceived to be
"damaged goods".
Either scenario can offer a potentially profitable trading
opportunity via the use of an option trading strategy known as the long
straddle. Let's take a closer look at this strategy in action.
The Mechanics of the Long Straddle