Welcome to this step-by-step guide on researching and preparing for classic directional earnings plays. These strategies involve predicting whether a stock will move upward or downward following its earnings release. Let's dive into how to approach this systematically, using sentiment analysis, historical performance, and options simulation to enhance your decision-making.

1. Understanding the Importance of Research

A critical driver of earnings reactions is the news released and how markets respond. To make informed directional plays, you need to:

• Aggregate news and sentiment data from the last quarter.
• Analyse whether the sentiment is predominantly positive, negative, or neutral.
• Identify key events that have influenced the stock’s trajectory.

2. Sentiment Analysis

Step 1: Filter Earnings Calendar

• Access the upcoming earnings calendar on the home screen.
• Focus on stocks with liquid options to ensure ease of trading.

Step 2: Interpret Sentiment Scores

• Open the Sentiment Screen
• Review the sentiment score for each stock. Scores range from -1.5 (highly negative) to +1.5 (highly positive).
• Example: A stock like DBI might have a sentiment score of -0.15, indicating a negative outlook based on AI analysis of news articles.

Step 3: Dive Deeper into News Context