12 Keys to Trading Earnings for Profits

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#2 How Does This Increased Activity Translate Into Real Dollar Gains?

Just consider these moves in some of today's most heavily traded stocks:

• In July 2006, Yahoo! (YHOO) fell 21.8% after earnings were released.
• During the same earnings period, shares of Apple (AAPL) shot up 11.8% in a day.
• In April 2008, Google (GOOG) gained 20% the day after earnings.
• Cisco (CSCO) dropped more than 9% the day after reporting first-quarter earnings in November 2007.
• Amazon (AMZN) popped 24% after second-quarter earnings in 2007.
• In 2008, Research In Motion (RIMM) gained an average of 12.6% on the day after each quarterly report.

Keep in mind that these gains were possible only if you had been on the right side of the move and were holding shares.  At the same time, those holding the right options on these stocks could have made a fortune. (We'll talk more about options a bit later.)

If there's one thing investors want to see in their investments, it's movement.  And there is no better time to see movement in share prices than during earnings season.