I've identified 4 stocks that I think will gain 10 - 20 % when their next quarterly report is released.

If you've only got access to a small amount of capital say USD10,000 then by buying USD2,500 worth of each stock and then each gaining 15% you'd only gain around USD1,500 which by itself isn't inconsequential, and if you had a large amount of capital employed 15% would be very welcome, but with a limited amount of capital is there a way to expand the overall profit?

Can you place a combined offer which would say: each of the 4 stocks will gain at least 14% when the next quarterly reports are released. This way if 3 gained 20%, and one gained 5% you would lose, but if all gained over the specified amount you would profit. Does such a thing exist?

If not is there another method of increasing gains (other than borrowing additional funds) with a fixed amount of capital?


It depends on the timing of the expected price movement with respect to the report time, and the timing of the report. If you can say with very high certainty that the prices will move as you suspect, then you don't need to worry about diversification- you only need to buy one at a time, and only hold the stock you expect to be appreciating most quickly at each point in time. For example, suppose each report comes out at even intervals of one hour, and price moves most quickly in the hour directly following a report. Then, you buy stock one right before the report, ride the wave up, liquidate your positions, move into stock 2, then 3, then 4. Similarly, if the reports are all released simultaneously, you can time your trades to first take a position in the stock which will adapt most quickly to the new information, then when that one slows down, on to the next. If executed correctly, the first strategy will yield a compounded return of 46%-107%- supposing, of course that all trends are predicted with perfect accuracy, which in reality is a very hard assumption to make honestly. Of course there are somewhat more sophisticated strategies if you could also hold short positions, or are aware of strong correlations of your predicted equities with other stocks.


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