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  1. Earnings season provides a great opportunity for equity traders to gain insight on stocks they have invested in, while also offering context to potential share price moves. Read on for more on what earnings season is, earning announcement dates to know, and what to look for in an earnings report. WHAT IS EARNINGS SEASON & WHY IS IT IMPORTANT? Earnings season is a period each fiscal quarter, usually lasting several weeks, where many of the largest listed companies announce their latest financial accounts. An earnings report consists of revenue, net income, earnings per share (EPS) and forward outlook, amongst a bevy of other data points, which can help to provide investors with insight relating to the current health and outlook for the company. This information can be found on sec.gov, various financial publications, and individual companies' websites. Earnings season is important because it helps market participants glean information from the companies that they are monitoring along with the broader index. For example, a strong Apple (AAPL) earnings report may see investors bullish on Nasdaq 100 futures, a concept discussed further below when looking at bellwether stocks. Something else that can accompany an earnings release is an earnings call. This is a conference between the company and analysts, press and investors which discusses the outcome of an earnings report and, in many cases, opens the floor for questions to company management. Such scrutiny of the reports can enable traders to access more information to further inform their decisions, although not all companies hold earnings calls. WHEN IS EARNINGS SEASON & WHEN DO REPORTS COME OUT? Earnings season takes place typically a few weeks after each quarter ends (December, March, June, September). In other words, earnings seasons begins around January-February (Q4 results), April-May (Q1 results), July-August (Q2 results) and October-November (Q3 results), with the unofficial start of earnings season usually marked by when the major US banks report results. This typically coincides with an increase in the number of earnings being released, while the unofficial end of earnings season is usually around the time that Walmart (WMT) announces its earnings report. 3 THINGS TO LOOK FOR IN COMPANY EARNINGS REPORTS There are a number of factors to look for in company earnings reports. Traders should be most mindful of the performance of the largest ‘bellwether’ stocks, understand the significance of an earnings recession in a given stock, and grasp how a stock’s earnings announcement might impact a relevant index, depending on the weighting of the given security. 1) Performance of bellwether stocks When analyzing company earnings, it is important to look out for ‘bellwether’ stocks which can be seen as a gauge for the performance of the macro-economy. While the status of a bellwether stock can change over time, the largest and most-established companies are typically considered a bellwether stock. Examples of Bellwether stocks are: FedEx (FDX): Ships goods for consumers and businesses across the globe Caterpillar (CAT): World’s largest heavy-duty machinery maker has been viewed as a bellwether given its large exposure to construction, manufacturing and agricultural industries, particularly in China 3M (MMM): Gauge for the health of the manufacturing sector Apple (AAPL): Among the world’s largest companies. Important for key suppliers, in particular, chipmakers. 2) Earnings recession An earnings recession is characterized as two consecutive quarters of year-on-year declines in company profits. However, while earnings are an important factor in stock market returns over the long term, an earnings recession does not necessarily coincide with an economic recession. The chart below shows that in the past six earnings recessions witnessed in the US, only two had coincided with an economic recession. The blue circles show where there was an earnings recession without an economic recession, while the red circles represent where both an earnings and economic recession occurred. 3) Earnings and stock index weighting Traders should understand that when trading earnings, certain stocks will have a greater impact on the wider index according to their index weighting. For example, when trading the Dow Jones, Boeing releasing its earnings will be highly influential on the index, while Visa likely won’t be as influential, due to the former’s 9.49% weighting compared to the latter’s 4.41%, as shown in the table below. This highlights the importance of paying close attention to bellwether stocks and how they may impact a broader equity index. TRADING DURING EARNINGS SEASON: TOP TIPS We have an in-depth guide on how to trade earnings season, but the important things to remember are: 1) Know the ‘expected’ results Being cognizant of what is ‘expected’ with regards to the revenue/sales and earnings per share (EPS) figures are important because a company’s share price reaction can often be determined by the amount by which they beat/miss an aggregate of analysts’ expectations. 2) Stay alert to surprise announcements Any surprise announcements that coincide with an earnings report can also impact the share price of a company. These may include stock buybacks/share repurchase programs as well as company guidance. 3) Be aware of spillover effects between stocks An example of spillover impact could be if an investor has a chipmaker stock within their portfolio (EG Dialog Semiconductor), earnings from Apple could have a sizeable impact on the stock. Consequently, it is important to assess related stocks, given that they may reveal the outlook for a sector, thus sparking a possible sector rotation. 4) Consider volatility over the bearing of an expected move Working out the ‘expected move’ on a directional basis for a stock in reaction to the binary earnings event can be a fraught endeavor. Alternatively, a view taken with volatility in mind instead can prepare investors for significant movement without positioning on the wrong side of the eventual outcome. EARNINGS SEASON: KEY TAKEAWAYS FOR INVESTORS AND STOCK TRADERS In summary, earnings season can be an influential driver in a trader’s experience. Make sure you keep up to date on the when the key earnings are released for individual companies in order to proactively plan. Be aware of how bellwether stocks, potential earnings recessions and stock index weightings can influence price movements. Keep a handle on what results are expected for each stock, be mindful of greater potential volatility for either analytical or strategic purposes and understand how one stock’s performance can impact another’s (or an index as a whole). Following these key tips can help the trader to attempt to weather earnings season and navigate the period more consistently. EARNINGS SEASON FAQS What does earnings season tell us about the global economy? Earnings season’s impact on the global economy is dependent on a range of factors, from the performance of given sectors to a variety of fundamental factors. While bellwether companies meeting or exceeding expectations can reflect a strong corporate environment, the stock market interacts with the economy in many different ways – so there isn’t always a predictable relationship between the two. How is earnings season impacted by financial downturns? Financial downturns may impact earnings season in a significant way – dampened demand for products and services caused by a downturn or more prolonged recession can naturally mean earnings failing to hit expectations in multiple sectors. However, perceived defensive stocks such as those in consumer staples or healthcare may weather downturns better or perhaps even become more attractive in such a backdrop. Is earnings season the same dates in the US and UK? When it comes to the US/UK earning season dates, UK and European companies tend to get the bulk of their earnings about two to three weeks after the US. MORE ON EQUITIES Want to build your equities knowledge further? Make sure to check out our stock market articles, with useful, straightforward insight on analyzing the most common capital market assets. Here are a few articles to get you started. Beginner’s Guide to Stock Trading Types of Stocks How to Invest in Dividend Stocks Article by Ben Lobel and Peter Hanks, Strategist. DailyFX 12th July, 2021.
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  2. Hi @JakubIG Thanks for the answer. So regarding the original question, there is no option to Sell covered calls for stocks that I own. As you only own the shares on an ISA or Share dealing accounts. Thanks, Fran
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  3. Please see the expected dividend adjustment figures for a number of our major indices for the week commencing 12th July 2021. If you have any queries or questions on this please let us know in the comments section below. For further information regarding dividend adjustments, and how they affect your positions, please take a look at the video. NB: All dividend adjustments are forecasts and therefore speculative. A dividend adjustment is a cash neutral adjustment on your account. Special Dividends Index Bloomberg Code Effective Date Summary Dividend Amount AS51 BIN AU 16/07/2021 Special Div 0.117 MIB MS IM 19/07/2021 Special Div 0.3 (Estimated) RTY BCC US 14/07/2021 Special Div 2 RTY INSW US 14/07/2021 Special Div 1.12 RTY HPK US 14/07/2021 Special Div 0.075 RTY XBIT US 15/07/2021 Special Div 2.5 (Estimated) SPX EOG US 15/07/2021 Special Div 1 How do dividend adjustments work? This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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  4. Hi @DavidLaw, we have requested this stock to be added. All the best - Arvin
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  5. Hello, I am trying to use IG API with the python Github (ig-markets-api-python-library). I can connect my DEMO session and have market information but I haven't been able to open a position. This is the code sent to open a position : resp = ig_service.create_open_position( currency_code='USD', direction='BUY', epic='CS.D.LTCUSD.CFD.IP', order_type='MARKET', expiry='DFB', force_open='false', guaranteed_stop='false', size=10, level=None, limit_distance=None, limit_level=None, quote_id=None, stop_level=None, stop_distance=None, trailing_stop=None, trailing_stop_increment=None) resp And this is the respond of IG API : {'affectedDeals': [], 'date': '2021-07-11T19:13:11.505', 'dealId': 'DIAAAAFY3HKNWAP', 'dealReference': 'FY5RRQQHA8TYM9', 'dealStatus': 'REJECTED', 'direction': 'BUY', 'epic': 'CS.D.LTCUSD.CFD.IP', 'expiry': None, 'guaranteedStop': False, 'level': None, 'limitDistance': None, 'limitLevel': None, 'profit': None, 'profitCurrency': None, 'reason': 'REJECT_SPREADBET_ORDER_ON_CFD_ACCOUNT', 'size': None, 'status': None, 'stopDistance': None, 'stopLevel': None, 'trailingStop': False} I do not understand the reason : 'REJECT_SPREADBET_ORDER_ON_CFD_ACCOUNT', Would anyone help me on this? Is there any issue related to my account? Thank you
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  6. Hi @JakubIG Thank you very much for your answer. My problem was as you said the DFB in expiry.😄 Have a good day, Nico
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  7. No Absolutes as previously stated , carry on . 🤐
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