Click to view the earnings moves in RY
RY Earnings Day: Does History Suggest a Surprise Rally or a Subdued Move?
Royal Bank Of Canada (NYSE: RY) released its earnings today, setting the stage for a potential stock move. But while options traders were bracing for a ±3.5% swing, the stock's early move is a more subdued +1.1% at $155.88. So, is this muted reaction what we should expect—or is there still potential for fireworks based on history?
Looking Back: RY's Earnings Day Playbook
If you're hoping for a major move after RY’s earnings, the odds might surprise you. Over the last 12 quarters, the average stock price change on earnings day has been a modest +0.6%. That's a far cry from today’s option market pricing in a ±3.5% swing. However, 58.3% of the time, RY's shares ended the day in the green, versus 41.7% moving lower.
The stock also has a habit of opening higher than the previous close (average gap of +0.8%), but from the open to the close, gains tend to fizzle, with the stock drifting down -0.1% on average—an even split between positive and negative closes. Notably, the downside risk (average move to low: -1.7%) often outweighs the potential move to the high (+1.4%).
| Stock Performance | Earnings Move | Open Gap | Open to High | Open to Low | Open to Close |
|---|---|---|---|---|---|
| Average Return | +0.6% | +0.8% | +1.4% | -1.7% | -0.1% |
| % of Moves Up | 58.3% | 75.0% | 50.0% | ||
| % of Moves Down | 41.7% | 25.0% | 50.0% |
For the absolute numbers fans, the magnitude of RY’s typical move on earnings day—regardless of direction—has averaged 2.7%, with a max swing of 5.5%. So while today’s move is in line with recent history, it’s well below the upper range.
| Stock Performance | Earnings Move | Open Gap | Open to High | Open to Low | Open to Close |
|---|---|---|---|---|---|
| Absolute Average Return | 2.7% | 1.2% | 1.4% | 1.7% | 1.7% |
| Max Absolute Return | 5.5% | 3.1% | 4.1% | 4.8% | 3.6% |
| Min Absolute Return | 0.5% | 0.0% | 0.1% | 0.1% | 0.6% |
What Happens After the Bell? Patterns in Post-Earnings Moves
The more interesting action may come after earnings day. Looking at historical trends, RY has shown a knack for positive momentum 1 and 2 days after the earnings report, with 91.7% and 83.3% of moves higher, respectively, averaging +0.9% returns on both days. That positive skew starts to taper off a week out and turns negative two weeks later.
| Stock Performance | 1 Day After Earnings | 2 Days After Earnings | 3 Days After Earnings | 1 Week After Earnings | 2 Weeks After Earnings |
|---|---|---|---|---|---|
| Average Return | +0.9% | +0.9% | +0.3% | +0.5% | -0.1% |
| % of Moves Up | 91.7% | 83.3% | 66.7% | 66.7% | 41.7% |
| % of Moves Down | 8.3% | 16.7% | 33.3% | 33.3% | 58.3% |
Takeaway: Cautious Optimism?
Today’s low options volume and a smaller-than-expected price move could be signaling investor caution, especially given that previous quarters saw options traders often betting on a much bigger swing than actually played out. Still, history suggests there’s a subtle upside bias immediately following earnings, with the majority of gains concentrated in the first 48 hours. For anyone curious about detailed trends across past earnings events, the full earnings move history for RY is available here.
Will this earnings cycle stick to the script, or will we see an outlier event? As always, knowing the history can help you separate the signal from the noise when watching Royal Bank Of Canada’s post-earnings moves.
Contact Information:
If you have feedback or concerns about the content, please feel free to reach out to us via email at support@marketchameleon.com.
About the Publisher - Marketchameleon.com:
Marketchameleon is a comprehensive financial research and analysis website specializing in stock and options markets. We leverage extensive data, models, and analytics to provide valuable insights into these markets. Our primary goal is to assist traders in identifying potential market developments and assessing potential risks and rewards.
NOTE: Stock and option trading involves risk that may not be suitable for all investors. Examples contained within this report are simulated and may have limitations. Average returns and occurrences are calculated from snapshots of market mid-point prices and were not actually executed, so they do not reflect actual trades, fees, or execution costs. This report is for informational purposes only, and is not intended to be a recommendation to buy or sell any security. Neither Market Chameleon nor any other party makes warranties regarding results from its usage. Past performance does not guarantee future results. Please consult a financial advisor before executing any trades. You can read more about option risks and characteristics at theocc.com.
The information is provided for informational purposes only and should not be construed as investment advice. All stock price information is provided and transmitted as received from independent third-party data sources. The Information should only be used as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments and trading strategies. The Company does not guarantee the accuracy, completeness or timeliness of the Information.
Disclosure: This article was generated with the assistance of AI