Stocks move all the time. That’s how we make money on HSX. The problem comes in predicting stock movements. For the most part, the exchange is an irrational market-the motion of a given stock on a given day isn’t tied to anything except traders’ whims. For example, STLT2 cycled this morning from $15 to $20 at least three times, before it dropped to $10.60. Predicting this movement in advance was impossible; while the cycle is apparent after the first swing, the point where the bottom drops out is a complete unknown. Trust me; I lost money on this today.

Fortunately, there are some outside factors that will always move a stock in specific directions by influencing traders to buy, sell, or short accordingly. The most famous is, of course, “Maxipulation.” Obiah has a pretty nice piece on that in his FAQ, so I won’t go into it here. (I’m told it’s bad for the guest to repeat what the permanent staff has already said, and I bore audiences quickly enough anyway.) Instead, the other easy to find, sure-fire stock moving piece of information is a release date. Or, to be more specific, a release date change.

Cinematter is king for release dates. Everyone should have this site bookmarked, and check it regularly. The biggest swings in stocks, in my opinion, come from Cinematter updates. Take the most recent (January 13) update: BLDE2 fell six points on news that it was pushed back a year. At the time Cinematter updated, BLDE2 was worth $35/share. That represents an 18% ROI within an hour. Not too shabby.

So it’s simple, right? When a movie’s release date is pushed back, the stock drops. When the release date is advanced, the stock rises. That’s certainly the basic rule, but it’s not always so simple. Look at another example from the recent Cinematter update. HHEEL was moved from April 7 to June 2. That would put the movie six months out, rather than three. However, the price actually rose two points on this news. Bearing in mind that HHEEL was trading at ~23, that’s not too bad.

The key is that June’s a much better month than April for movie releases. It’s the height of the summer season, and any movie benefits from that. School’s out, people are taking vacations, and a movie has more opportunities to break out. This is true even in a fairly crowded field. The fact that a studio moves a movie from a fairly empty April weekend to mid-summer indicates that the studio feels the movie (and thus the stock) is stronger than anticipated, and is willing to push it in the big season, rather than letting it languish on a poor weekend. The key for sliding release dates is to know how movies perform in a given month from a historical perspective. That will help a trader properly evaluate whether the box office potential of a movie is weakened or strengthened by the move. Note, however, that if the move’s extreme this doesn’t apply. For example, a movie changing dates from mid-February (a poor month) to December (a good month) is probably a short, regardless. The original date was too close, and the date change in this case is more a sign of a studio shuffling off the film rather than displaying confidence. If the studio were confident, the film would have been moved to sometime between May and August.

Additionally, I personally don’t bother to short movies under ~$20, no matter what the date change is. The stock’s not worth enough to move significantly downward, and there’s always the risk that other traders will be too disinterested in a $12 stock’s date change to trade it. If that’s the case, you’re left eating the 2% commission (once in, once out) for zero profit.

That’s release dates in a nutshell. With a bit of common sense and a feel for historical monthly box office performance, release dates are a trader’s best friend. There are fewer sure ways to make money, and lots of surer ways to lose it. Happy trading.