Tuesday Bank of Montreal kicks off the bank earnings for the quarter. Analysts everywhere are indicating that Canada’s big 6 banks are going to disappoint “big time”. To make matters worse, most analysts also expect the banks’s forward guidance to be cloudy and ominous. A number of brokerages have cut the banks to underweight from market weight. Basically this means “sell”.
Royal Bank of Canada, Toronto-Dominion Bank and Bank of Novas Scotia are among the top 20 most shorted stocks in Canada. Bank of Montreal saw short positions move higher during the first two weeks of February. When the Bank of Canada cut its rate a quarter of a percent, banks refused to follow and instead lowered their prime rates by just 15 basis points. Analysts point to this as another signal that Canada’s bank are losing revenue.
All of this means higher volatility. It also means profits through taking advantage of the volatility earnings can bring. This is a lengthy strategy outline with 1500 words requiring 6 pages if printed. It is for FullyInformed Canada Members. These strategies are the ones I use often during Canadian banks earnings seasons. I used them over the last two quarters and will be using them again this earnings season.
Canadian Bank Earnings On Tap – Time For More Profits
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Disclaimer: There are risks involved in all investment strategies and investors can and do lose capital. Trade at your own risk. Stocks, options and investing are risky and can result in considerable losses. None of the strategies, stocks or information discussed and presented are financial or trading advice or recommendations. Everything presented and discussed are the author’s own trade ideas and opinions which the author may or may not enter into. The author assumes no liability for topics, ideas, errors, omissions, content and external links and trades done or not done. The author may or may not enter the trades mentioned. Some positions in mentioned stocks may already be held or are being adjusted.
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