There are a lot of aspects to maintaining your stock portfolio. You need to monitor your shares with different companies, to keep an eye on trends, and to follow your risk management strategy. The bustle suddenly picks up as the company earnings season approaches.  

You may find some people preparing to complete massive trades during that time, while others don’t make much of a fuss out of it. So what does earnings season really entail? More importantly, should you also be ready to trade at a moment’s notice? Should you think of derivatives and include CFD trading shares providers such as easyMarkets? Keep reading this guide for a few pointers

When is the earnings season?

Some novice investors may find themselves confused about when exactly earnings season is. Other investors you may know start discussing their shades and trades at different points throughout the year, and you might end up feeling like you’ve missed something.

There are actually four earnings seasons each year. They’re called seasons rather than “earnings days” or “earnings weeks” because different companies have different timetables each season.

As a rule of thumb, an earnings season occurs 2 to 4 weeks after a fiscal quarter ends. Most quarters end in the last week of June, September, December, and March. Companies release data regarding their earnings for the quarter in the following month.

Stock market earnings reports explained

Most companies schedule a conference call with their investors to discuss performance, losses, gains, and strategies for the new year. As a shareholder, you can also find public copies of these records to review on your own.

However, you probably have some questions about the wide array of terms and figures on the report. This explanation details what exactly you should expect and look for on each report. But the bottom line – which is literally the bottommost line of an earnings report – is the quickest reference point for how much profit the company brought in.

That figure is a good guiding point, but it still doesn’t tell the whole story. Check out whether the cost of doing business is going up, what the forecasted growth for the year is, and if the company anticipates any losses.

Planning your trades

As we’ve noted before, you might notice a lot of activity around earnings season. Does this mean you have to trade as well? Not at all. In fact, it’s far better if you plan your trades before reports are released and stick to your plan.

It’s not uncommon for impulsivity and knee-jerk reactions to take over instead of logic. Don’t fall into the trap and expose your account to more risk. Instead, look up the last year’s reports and see if you can identify any trends on your own.

Once you’ve anticipated obvious losses, sit down and do a few calculations. Decide what the bar is for company metrics that are going to cause you to sell. When the earnings reports come flooding it, stick to your strategy and only trade if it makes practical sense.