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How to Trade Earnings with Options: 7 Great Tips

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Welcome to Episode #53 of the Zacks Market Edge Podcast.

Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.

In this episode, Tracey is joined by David Bartosiak, editor of Zacks Momentum Trader and Home Run Investor, to discuss Dave’s best tips for trading options during earnings season.

Every week, Dave shares his best option trades via video on Live Trader on YouTube.

So who better to give us some tips on trading these reports?

Here’s a sampling of Dave’s tips:

Tip #1: Finding the Right Stocks: you usually want to be in the hottest, trendiest momentum-type stocks. You can use Stocktwits or Google to find what those are.

Tip #4: Check out the trend with the price and consensus and earnings surprise chart. Look at this chart for Alphabet (GOOGL - Free Report) . What does it tell you?

ALPHABET INC-A Price, Consensus and EPS Surprise

ALPHABET INC-A Price, Consensus and EPS Surprise | ALPHABET INC-A Quote

Tip #5: Dig into the detailed estimates. They might not always be what they seem. Dave discussed the difference between Nvidia (NVDA - Free Report) and Compass Minerals (CMP - Free Report) even though both have the same Zacks Rank.

Tip #6: Analyze volume based charts: this helps traders uncover potential support and areas of resistance.

Dave discussed how this helped him in his analysis of Kansas City Southern .

On Zacks Live Trader, Dave looked at the options action on another railroad CSX (CSX) for this earnings season. Watch his analysis below.

Tracey and Dave also discuss Delta Airlines (DAL - Free Report) with regards to one of Dave’s tips. It’s reporting soon.

Want to get all 7 of the tips? Be sure to tune into this week’s podcast.

Want to Learn More on Trading Options?

If you want more detailed analysis of how to actually do an options trade, and not just during earnings season, Kevin Matras and Tracey discussed how to trade options: for beginners.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec and she also hosts the Zacks Market Edge Podcast on iTunes.