Amazon is one of the most closely watched stocks on the market. Although the company rarely produces anything by way of earnings per share, the stock draws an incredible amount of interest and generally reacts positively to earnings. With that said, AMZN is expected to report earnings tomorrow, October 22nd after the closing bell. The event is likely to cause quite a bit of movement that will give binary options traders incredible opportunity. Today, we'll talk about what I'm expecting from earnings, the reaction that's likely to happen, and how binary options traders can take advantage of the trends.

What I'm Expecting From Amazon's Earnings Tomorrow

All in all, I'm expecting to see a positive earnings release out of Amazon tomorrow. While the company has had a bit of a mixed earnings history over the past 7 quarters, things are looking positive for Amazon at the moment. With regard to earnings history, over the past 7 quarters, we saw 3 instances of Amazon producing better than expected, 3 instances of the company producing less than expected and one instance of the company reporting earnings as expected. However, if you look at more recent earnings history, it draws a more positive picture. In fact, over the past three consecutive quarters, Amazon has beat earnings expectations by a wide margin.

This quarter, analysts are expecting to see earnings come in at a loss of $0.10. However, I have a slightly more bullish opinion. There are a few things that I must take into account when it comes to my opinion of earnings expectations. First and foremost, Amazon has seen solid growth in Amazon Prime. While Prime seems like a losing endeavor at first glance, members of prime have proven to spend quite a bit of money shopping on Amazon. In the past few months, we've seen a couple of announcements from Amazon, explaining that growth in Prime memberships has been impressive.

Aside from Amazon Prime, I've kept a relatively close eye on Amazon Web Services since the company announced earlier this year that the company had already grown to be worth $5 billion. While there hasn't been much since by way of releases about Amazon Web Services, I believe that this company is likely growing, which of course, will lend a hand to Amazon's earnings; pushing them above expectations.

What We Can Expect From The Market After Earnings

Throughout the history of the company, Amazon has seen incredibly strong reactions after earnings. So, in generally, this is what we can expect. However, this earnings report isn't the same as Amazon's average report. This time around, a mix of Prime Day causing increased subscriptions for Amazon Prime and high expectations from AWS financial has overall expectations for earnings relatively high. With that said, while I am expecting to see Amazon beat earnings, it is possible that there's a miss. With that said, if things go as expected, we are likely to see earnings act as a positive catalyst for the stock, pushing it much higher. However, if earnings are a miss, we can expect to see a bit of volatility.

How Binary Options Traders Can Take Advantage Of The Trends

You should never start trading before earnings. It's always a good idea to wait for the report to come out and react based on the resulting trends. Because of the nature of this report, that is even more important than ever before. With that said, watch to see what happens with the report. If the report is positive, you're likely to see solid upward movement giving plenty of opportunities for call option profits. Adversely, if the report is negative, we're likely to see more seesaw like movement. So, in this case, you will want to follow the stock down to the support trend line and purchase calls at this point. From there, follow the resulting uptrend up to profit, purchasing a put at the peak. Continue following this trend until it runs dry. Keep an eye on the latest financial news.

What Do You Think?

Where do you think AMZN is headed and why? Let us know in the comments below!

[Image Courtesy of Forbes]