The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to be talking about earnings surprises, what they are and I want to share three examples with you. Now, the key thing to understand about earnings surprises is that they can happen in either direction and it doesn't necessarily always have to be this difference between what analysts or Wall Street expects the company to make and what they actually make. In fact, a lot of earnings surprises can come as a result of guidance that the company has or based on the underlying expectation of actual market participants. What do I mean by saying all this? Well, when a company announces earnings, typically what will happen is you will also have some of these big companies that are followed by research analysts. And so, a research analyst might publish their expectation of where the company's revenue and earnings and growth should be for this quarter. Now, all of these research analysts pull their numbers togeth