To the average investor, earnings announcements may seem like manna from heaven
a godsend designed to provide instant outsized profits. That attitude can be
understandable. It's not uncommon to see stocks explode higher and generate
huge gains for stock and options traders in a single day following their
quarterly release. Take Google (NASDAQ: GOOG ) for instance. In response to its
last two earnings releases, it was up a quick 13% and 7%, respectively. One huge
challenge with trying to play the earnings game, without a game plan, is the
fact that a large portion of the so-called manna is laced with arsenic.
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