Chapter 2. Earnings Announcements: Why Are They So Important?

This chapter discusses how earnings announcements are made, why they’re so important, and some of their critical features. It’s important to understand these basic concepts of earnings announcements because they are the building blocks of the options trading strategies discussed in later chapters.

What Are Quarterly Earnings Announcements, and Why Are They Important?

In the United States, publicly traded companies are required by the Securities and Exchange Commission (SEC) to publicly report their financial performance each quarter. The formal quarterly reports submitted to the SEC are called the 10-Q reports. However, most companies officially announce their quarterly performance ...

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