Ask the Geek: Add a Fundamental Twist

Stay on top of profitability data using a fundamental filter in the Earnings Watchlist from thinkorswim®, and the new Earnings data set in the Analyze tab.

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I trade earnings on companies that have a history of profitability and a market potential for moving soon. How can I stay on top of all of the companies that I might be interested in and not waste my time with hundreds of charts and hours of research?

Here’s the executive summary: Add this watchlist to your thinkorswim® platform to find the data you are looking for: http://bit.ly/TM36earnings.

Let’s look at this in more detail. You’ve loaded the watchlist into your thinkorswim platform, and it’s now time to tear it apart. Because this is a scan, it'll first scan all the optionable symbols. Second, it uses a fundamental filter to look at only companies that’ve reported positive net profit margins. Third, it limits the scan to only companies that will announce earnings in the next five days. And last, to satisfy the criteria of stocks that have a market potential for moving, the scan is limited to companies that have a market maker move (MMM) over $1. MMM is an indicator that figures out the expected magnitude of price movement based on market volatility. It uses the stock’s price, volatility differential, and time to expiration in its calculation. To make that watchlist work for you, you’ll need to set up an alert so you get a push notification, text message, or email whenever a new symbol is added to that watchlist.

As luck would have it, we’ve focused on making the earnings trader’s life simpler with a new feature that you need to check out. It's a whole new analysis mode. Take a look at the Analyze tab. You’ll see a new “lightbulb” icon called Earnings. Earnings is a detailed view into a unique data set from Estimize*, a third-party company whose crowd-sourced earnings estimates offer a new trading insight. With this feature you can view earnings per share (EPS) and revenue estimates over the last eight quarters and track how Wall Street and the crowd have fared against the actuals. We added options volatility and stock pricing data for five days leading up to and five days past each earnings event. So, as you’re picking your potential trade, whether it’s a stock, risk-defined option strategy, or something more directional, you have more relevant data indexed and immediately available.

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*Estimize crowdsources earnings and economic estimates from hedge fund, brokerage, independent and amateur analysts. TD Ameritrade does not represent or warrant that the information is accurate, complete, reliable, or current. TD Ameritrade and Estimize are separate and unaffiliated companies.

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