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As I'm sure all of you know, I spend a lot of time poring over data and charts every single day looking for opportunities.
Of course, with earnings season now hitting a full swing, the opportunities really start to pop. There are a few important things to remember though.
First, if you're trading options ahead of earnings announcements, you're paying for it. I did an interview with TD Ameritrade's television network on Monday during which we talked Amazon ahead of its results this week. Side note: I think that the stock is heading for a breakout of $1,700 on its way to $1,600, but that's another story.
When asked about playing options on Amazon.com Inc. (NASDAQ: AMZN), I had to point out that you're paying a premium for this big name due to the wide prices and earnings forecasts. In other words, you're paying extra for uncertainty; that's how the options world works.
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About the Author
Chris Johnson is a highly regarded equity and options analyst who has spent much of his nearly 30-year market career designing and interpreting complex models to help investment firms transform millions of data points into impressive gains for clients.
At heart Chris is a quant - like the "rocket scientists" of investing - with a specialty in applying advanced mathematics like stochastic calculus, linear algebra, differential equations, and statistics to Wall Street's data-rich environment.
He began building his proprietary models in 1998, analyzing about 2,000 records per day. Today, that database, which Chris designed and coded from scratch, analyzes a staggering 700,000 records per day. It's the secret behind his track record.
Chris holds degrees in finance, statistics, and accounting. He worked as a licensed broker for 11 years before taking on the role of Director of Quantitative Analysis at a big-name equity and options research firm for eight years. He recently served as Director of Research of a Cleveland-based investment firm responsible for hundreds of millions in AUM. He is also the Founder/CIO of ETF Advisory Research Partners since 2007, noted for its groundbreaking work in Behavioral Valuation systems. Their research is widely read by leaders in the RIA business.
Chris is ranked in the top 99.3% of financial bloggers and top 98.6% of overall experts by TipRanks, the track record registry of financial analysts dating back to January 2009.
He is a frequent commentator on financial markets for CNBC, Fox, Bloomberg TV, and CBS Radio and has been featured in Barron's, USA Today, Newsweek, and The Wall Street Journal, and numerous books.
Today, Chris is the editor of Night Trader and Penny Hawk. He also contributes to Money Morning as the Quant Analysis Specialist.