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 trying to answer the question, “Should we stop estimating earnings for stocks?” Really, where this came out of is – Recently, we’ve gone through another earnings season here in the US markets and a lot of companies have had huge gyrations or volatility swings in their stock. In particular, we’ve seen companies like Netflix and Facebook that got absolutely crushed after their earnings and it was all based on expectations and growth. But Facebook alone was down more than 20% the day after it announced earnings. Now, just to again, put it into a little bit of context, they literally went through a bear market decline in one single day. Investors in Facebook lost 20% of their equity and they one minute full swoop between the time that the market opens and started trading and it’s huge, huge gyrations. And so, the question that some users had brought up to me was, “Should we stop doing all this esti