🎯 In 30 seconds: Big news moves prices in seconds, and you are not the fastest reader. Scheduled events (earnings, Fed meetings, jobs and inflation reports) can be planned around. Unscheduled ones (halts, lawsuits, deals) cannot. Prices react to news compared with what was expected, not to whether the news sounds good. The practical edge for most people is not speed but preparation: knowing the calendar, sizing for gaps, and waiting for the first reaction to settle.
Scheduled and unscheduled events
A scheduled event has a known date and time: a company's earnings report, a Federal Reserve decision, a government data release, an FDA decision date for a drug. You can see it coming on a calendar.
An unscheduled event arrives without warning: a merger announcement, a CEO leaving, a lawsuit, a product recall, a cyberattack, a war. You can only plan how you will respond, mostly by keeping position sizes small enough that a surprise does not hurt you badly.
The earnings calendar and the news and economy page show the scheduled side. Check them before every trade.
Why reacting to headlines is hard
- Speed. Professional firms use automated systems that read headlines and data releases and trade on them faster than any person can click. By the time you read the headline, the first move has usually happened.
- Expectations. Markets price in what people expect. A company that grows profit 20% when analysts expected 30% can fall. A weak jobs report can lift stocks if traders think it means lower interest rates. This is the "buy the rumor, sell the news" effect from Why prices move.
- Whipsaw. The first move after news is often partly or fully reversed within minutes as bigger players digest the details.
- Worse prices. Spreads widen and liquidity thins right around news. Market orders and stop orders can fill far from the last price (Bid, ask and liquidity).
- Fake or wrong news. Social media posts, edited screenshots and fake accounts can move a stock for minutes. Confirm news with the company's own release or an SEC filing (Market data sources).
Earnings
US companies report quarterly results, usually before the 9:30 a.m. open or after the 4:00 p.m. close. So the reaction often appears as a gap: the next session opens far from the previous close. See Earnings season for how to read the report itself.
The options market's expected move. Before earnings, option prices rise because traders pay up for protection. You can use them to estimate how big a move the market is pricing in. A quick rule of thumb: the price of the at-the-money straddle (one call plus one put at the strike nearest the stock price, expiring just after the report) roughly equals the expected move.
Worked example (hypothetical). Company X trades at $80.00. The at-the-money call costs $3.10 and the put costs $2.90.
| Straddle price: $3.10 + $2.90 | $6.00 |
| Expected move as a percent: $6.00 / $80.00 | about 7.5% |
| Rough range the market is pricing in | $74.00 to $86.00 |
This is not a forecast of direction, and actual moves often land outside the range. It does tell you the size of gap you should assume when sizing a position you hold through the report. Options pricing is covered in Implied volatility.
Three common ways to handle an earnings report:
- Be flat. Close the position before the report. Simple, and the default for most swing traders.
- Hold, smaller. Size so that a gap of the full expected move, or more, costs no more than your normal risk. If you would normally risk $200 and the expected move is 7.5%, a position of about $200 / 0.075 = $2,667 keeps the planned gap loss near $200. Assume a real gap can be twice that.
- Trade the reaction. Wait for the first 30 to 60 minutes after the open on report day, let the range form, then trade a break of that range with a stop on the other side.
Fed days and economic releases
The Federal Reserve's policy committee (the FOMC) meets eight times a year. Its decision on interest rates and the statement explaining it come out in the afternoon of the final meeting day, and the Chair usually holds a press conference afterward. As of October 2026, the remaining 2026 meetings on the Fed's calendar are October 27 to 28 and December 8 to 9. Always check the Fed's calendar for the current dates.
Fed afternoons are known for whipsaw: a sharp move on the statement, a reversal during the press conference, and sometimes a third move into the close. See The economy and stocks for why rates matter so much.
Major US data releases from the Bureau of Labor Statistics, including the monthly jobs report (Employment Situation) and the Consumer Price Index, come out at 8:30 a.m. Eastern, before the stock market opens. For example, BLS lists the jobs report for November 6 and December 4, 2026, and CPI for November 10 and December 10, 2026. Stock index futures and pre-market prices react first, so the regular session often opens with a gap.
FDA decisions and other binary events
For small drug companies, an FDA approval or rejection, or the result of a key clinical trial, can decide whether the company has a business at all. These are close to binary events: the stock can double or lose most of its value overnight.
There is no stop that protects you here. If you trade around a binary event at all, the position size must assume the worst case. With a $10,000 account and a 1% loss limit, a position that could lose 70% overnight can only be about $100 / 0.70 = $143. Most beginners should simply not hold through these.
Trading halts
Exchanges can stop trading in a single stock. The most common regulatory halt is a news pending halt, when a company is about to release material news; it gives everyone time to read it. Other markets honor the halt of the primary listing exchange. Separately, the Limit Up-Limit Down mechanism pauses a stock for five minutes when it hits the edge of its price band and does not come back within 15 seconds.
What this means for you: while a stock is halted you cannot trade out of it, and it can reopen at a very different price. Orders you left resting may fill at the reopening price. The full set of halts and market-wide circuit breakers is in The rules every trader runs into.
An event-day plan
| Event | When | Default plan for a beginner |
|---|---|---|
| Earnings of a stock you hold | Before open or after close | Close or size for a gap of 2 x the expected move |
| FOMC decision | Afternoon of the last meeting day | No new trades from an hour before until the press conference ends |
| Jobs report, CPI | 8:30 a.m. Eastern | Expect an opening gap; no market orders at the open |
| FDA or trial result | Often unannounced time | Do not hold through it |
| News-pending halt | Any time | Wait for the reopening and the first few minutes of trading |
Try it
Pick three stocks with earnings in the next two weeks from the earnings calendar. For each, write down the price and, if your broker shows options, the at-the-money straddle price the day before the report. Compute the expected move. After the report, record the actual move. After a few seasons you will have your own table of how often moves land outside the expected range, which is the number that matters for sizing.
- What is the difference between a scheduled and an unscheduled event? Give an example of each. Answer: A scheduled event has a known date and time, such as an earnings report or a Fed decision. An unscheduled one arrives without warning, such as a merger announcement or a lawsuit.
- A stock trades at $80.00. The at-the-money call costs $3.10 and the put $2.90. What move is the market pricing in for earnings? Answer: About $6.00 either way (the $6.00 straddle), about 7.5%, or roughly $74 to $86. It is not a forecast of direction.
- You normally risk $200, and the expected earnings move is 7.5%. About how big a position keeps the planned gap loss near $200? Answer: About $2,667 ($200 / 0.075). The chapter adds that a real gap can be twice that.
- You have a $10,000 account and a 1% loss limit. A small drug stock could lose 70% overnight on an FDA decision. How big could the position be? Answer: About $143 ($100 / 0.70). Most beginners should simply not hold through these events.
Sources
- Federal Reserve: FOMC meeting calendars and information
- Bureau of Labor Statistics: Employment Situation release schedule
- Bureau of Labor Statistics: Consumer Price Index release schedule
- Investor.gov (SEC): Trading halts and delays
- Investor.gov (SEC): Stock market circuit breakers, including Limit Up-Limit Down