Prop Training Section 3 - Trading During a Conference Call

TRADING DURING A CONFERENCE CALL

From www.briefing.com:
Last updated: 30-Mar-07 10:56 ET GPN Global Payment aggressively slides lower intraday as it breaks below its Aug-Mar range low of 36.32 (36.00 -3.24) - Update - Technical

Note that the co is currently on a conference call.

SMB Comments….

During our AM meetings we often ask that you research whether a company will have a conference call during the day and when. Why? Please see the chart above. GPN fell from near 40 to below 33 during their conference call on Friday. Ripper. This is a move that you cannot be in.

We ask that you understand your risk before each trade. During the conference call you do not know what the company might say. They might say something extremely positive which makes the stock spike upwards. They may say something extremely negative which causes the stock to fall sharply. They may say nothing new. You just don’t not know what a company may say. You do not know your risk of entering a trade during the conference call. If you do not understand your risk then you cannot conclude that your risk versus reward is favorable. If you cannot conclude that your risk versus reward is favorable then you should not make a trade. So you should not trade during a conference call.

On the Street, there is an old saying: Live to play another day. This is one of those moves where there are no other days. This is a move that wipes out your account. That is why you should not trade a stock during a conference call. That is why you must know when a company is going to have a conference call. You cannot absorb a loss like the above. Do not trade during a conference call.

Save if you are an experienced trader, listening to the conference call and know the stock well.