Upcoming 2Q20 United Airlines Earnings Call
United Airlines Holding Inc. (UAL) will be hosting their Q2 2020 Earnings call on July 22, 2020 at 10:30am EST. You can register to watch their webinar directly from their Investors Relations page ir.united.com.
On July 8th, United Airlines began to start operating flights from San Francisco and Shanghai’s Pudong International Airport via Seoul’s Incheon International Airport. “United’s service to mainland China has been a point of pride for our employees and customers for more than 30 years,” said Patrick Quayle, United’s vice president of International Network and Alliances. “Resuming service to Shanghai from the United States is a significant step in rebuilding our international network.”
Since the international bans that were put in place during the start of this year many airlines completely seized to operate international routes. United Airlines with their fleet of Boeing 777-300ER operated many routes into the Asian region of the world. For on time period United was the largest U.S Carrier serving the China market and the Japan market.
This plays a large role in part of why United Airlines dropped down so dramatically and sharply in comparison to other commercial airlines that were not so directly exposed to the Asian Market. As we have all learned to navigate this Post Covid-19 outbreak world there has been various new strategies being implemented across the industry.
United’s Commitment to safety
United Airlines has been taking an active role in ensuring the safety of their guests journey.
United has teamed up with Clorox and Cleveland Clinic to redefine cleaning and health and safety procedures from check-in to landing and has implemented more than a dozen new policies, protocols and innovations designed with the safety of customers and employees in mind, including:
- Requiring all travelers – including crew members – to wear face coverings and temporarily revoking travel privileges for customers who do not follow these requirements.
- Using state-of-the-art high-efficiency (HEPA) filters on all United mainline aircraft to circulate air and remove up to 99.97% of airborne particles
- Using electrostatic spraying on all aircraft before departure for enhanced cabin sanitization
- Adding a step to the check-in process, based on a recommendation from the Cleveland Clinic, requiring customers to acknowledge they do not have symptoms of COVID-19 and agree to follow our policies including wearing a mask on board
- Offering customers a touchless baggage check-in experience at more than 200 airports across the United States; United is the first and only U.S. airline to make this technology available
For more details on all the ways United is helping keep customers safe during their journey, please visit united.com/cleanplus.
UNITED AIRLINES HOLDING INC
United’s shared purpose is “Connecting People. Uniting the World.” For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of United’s parent, United Airlines Holdings, Inc., is traded on the Nasdaq under the symbol “UAL”.
Volatility of Earnings Trades
Earnings reports are considered major events in the market and are known to be catalyst for movement. For days when earnings are being reports there can be large spikes in the market in either direction. Often times many market makers will state that the market has already priced in the earnings play for the result based on consumer perceptions.
To know what a company will report on earnings day is not possible (unless you are inside trading, which is illegal.) So as traders the best strategy that we can implement is either wait for the report to come out and watch how the market reacts to the news. Then based on the results and the outcome of the market then making a directional play based on the results of the information.
The second approach would be the more risk inclined approach that also has the potential of providing a greater reward. Making a assumption of what the results will be of the earnings report and how the market will react to it then enables you to make a highly educated highly probably approach that supports your bias.
When we look at a company like United Airlines coming up before earnings based on the technical perspective we can see a upwards trending channel start to be respected based on the support level of the bottoms. Trading volume has been decreasing slowly over the last few weeks and Relative Volatility Index (RVI) is currently in the range of around 40.
Rules for Investing in a Turbulent Market
The airline market is extremely volatile at the moment due to it being directly affected from the pandemic. Many opinions and ideas regarding the market are extremely skewed. There is little certainty currently as the future will be gauged based on consumer confidence and overall economic factors. As we have seen where when the market is doing well then more individuals and corporations are looking to travel and take vacations.
When we as technical traders are going to invest in turbulent markets its important that we define and set up rules for ourselves to follow. Failure to do so could lead us holding on to a loosing trade for too long or closing a winning trade too soon.
Defining set rules for your trading strategy and stick to them. When trading turbulent markets these are a few of the rules we have set for ourselves.
- Only Invest in Highly Liquid underlyings
- Only invest in the listed marketplaces
- Stay small
- Operate Mechanically
- Stick to your analysis
To conclude this post we see how United Airlines has been actively bringing back routes to popular destinations, Developing new systems and procedures for keeping cabins cleans and guests comfortable. Their stock price has dropped down from the highs of nearly $80 a share to a low of under $20 a share. We are currently sitting at $33 at the time of writing this article and earnings for Q2 2020 are coming out.
Based on standard deviation the range which it could move to with the current implied volatility is between the low of $24 and the high of $45 for the next 30 days. Day before earnings many of the options will having higher implied volatility which results in premiums also being increased.
Make sure you are defining risk to reward ratios that create a highly probable trade that makes you comfortable. Remember when trading its not about comparing yourself to others but being 1% better today than you were yesterday.
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Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options: https://www.theocc.com/components/docs/riskstoc.pdf
Air Market Group content is provided solely by Air Market Group LLC and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, transaction or investment strategy is suitable for any person. Trading securities can involve high risk and the loss of any funds invested. Air Market Group, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors, and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. Air Market Group is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparison, statistics, or other technical data, if applicable, will be supplied upon request. Multi-leg option strategies incur higher transaction costs as they involve multiple commission charges. Air Market Group is not a licensed financial advisor, registered investment advisor, or a registered broker-dealer. Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.
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