2013-01-17 14:44:04 - City Index UK: The fourth-quarter earnings season picks up pace in the US this week, with a swathe of major companies announcing results starting Wednesday, January 16.
LONDON--(Marketwire - January 17, 2013) -
Internet giant eBay will be amongst the first to announce earnings today, as it reports Q4 results along with financial services giants Goldman Sachs and JP Morgan.
Unlike shares trading, where one can typically profit from buying when a company's share price is low and selling when prices move higher, spread betting offers traders the opportunity to profit even when a company's share price is expected to fall. This is especially handy around earnings season, when share prices can be subject to increased volatility if a company's results come in higher or lower than market expectations.
Expectations of improved results can trigger a flurry of buying activity before a company posts its results, pushing share prices
higher, while expectations of poorer-than-expected results can trigger panic selling among investors who try to bank their profits before prices can fall.
Take UK-listed firm Marks and Spencer for example. This retailer saw its share price slip by around 3.4% on Thursday, January 10, after its results were leaked following market close on Tuesday. The results showed that the company recorded a worse-than-expected decline in sales in the last quarter.
How will you trade US equities?
This week's major announcements include results by eBay, Goldman Sachs and JP Morgan on Wednesday, followed by American Express, Bank of America, Citigroup and Intel on Thursday. The week closes on Friday with an earnings report from industrial bellwether stock General Electric.
Spread betting offers the ideal alternative to conventional stock trading during earnings season, enabling you to net a profit by short selling even if prices are set to decline. You can still, of course, make a profit by going long if you expect that a company's share price will rise once the earnings results have been announced. However, if prices move against you, you would make a loss.
Find out more about spread betting with financial spread betting provider City Index.
Remember, with spread betting your losses are magnified in exactly the same way as your gains if the market moves against you and can result in losses exceeding your initial outlay. Please ensure you fully understand the risks involved.