Goldman Works Out Best Times to Enter, Exit Earnings Trades
- Liquidity is usually ample in five days leading up to results
- Consumer discretionary industry is ticket to outperformance
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As earnings season powers ahead, the question of when to enter and exit stock trades has been answered by Goldman Sachs Group Inc.
Over the past decade, liquidity has risen before results, then dropped on the day itself as volatility increases and quants stay away, according to calculations from the U.S. bank. In other words, volumes were spurred by anticipation of corporate reports, and volatility fanned by reaction to them.