Earnings that were released after hours on Thursday July 27 from Amazon Stock (AMZN) were very poor. Their quarterly earnings missed by a wide margin.They reported a net income of $197 million on sales of $38 billion which was a decline of 77% from the same quarter last year. Analysts were expecting $1.41 a share on average. Instead they earned 40 cents a share which was below last year’s earnings of 52 cents a share on revenue of $39.9 billion.
This should see the stock fall deeper than it did after hours on Thursday. More on that is below.
Amazon Stock Chart Intraday 5 Minutes
With the stock up into the lunch hour, selling erupted shortly after 12:00 PM. This kind of sell-off intraday before earnings are announced always makes me wonder if some investors were aware the quarterly results were going to be “bad” and these quarterly results were definitely what would be referred to as “bad”.
Looking at the intraday chart below you can see the massive volume as the stock turned and dropped 3.3% to $1044 within an hour. This is why I believe strongly in options as the main method to control risk. I don’t believe that investing is a level trading field for all investors. As a small retail investor I believe the trading field is tilted not in my favor. Through using options as well as stock I believe I can work toward being on a more equal footing with the big investors as well as the automated systems. By selecting the option prices I would actually own Amazon stock at and selling options at those prices, I can miss out on possible stock manipulation. As well, at times, I can benefit from a major drop if indeed there was some “inside” information shared. Whatever the case, these kinds of intraday events must make a lot of investors wonder “who” may have known “what”.
Amazon Stock Long Calls Stopped Out
One other event that occurred today was my long call position in Amazon stock, was stopped out in the lunch decline. I did not anticipated that would happen and forgot to remove the stop-loss being used. I will post the results of the call trade in Amazon Stock shortly for members, but for those investors holding long positions, remember that events like today’s plunge in Amazon can have unexpected consequences if we forget to adjust trades in advance of earnings or major announcements such as I did today.
Amazon Stock On July 28 2017
After hours the drop was not intense. I am not expecting that to be the case on Friday. The rest of this article is for members.
The rest of this Amazon Stock strategy article is for FullyInformed Members.
Handling My Amazon Stock (AMZN) Trade For After Earnings on Jul 28 2017
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