What strategies can traders use around HPP's earnings surprises?

Given Hudson Pacific's (HPP) recent negative earnings surprise, traders might consider the following strategies: 1. **Mean Reversion**: Traders could employ a mean reversion strategy, buying HPP shares following the negative earnings surprise. This assumes that the stock price will tend to revert to the mean after the initial negative reaction, especially if the company's fundamentals remain solid. 2. **Post-Earnings Announcement Drift (PEAD)**: Investors might capitalize on the initial price movement following the earnings release and hold positions to benefit from the prolonged trend. This involves recognizing that stocks often continue to drift in the direction of an earnings surprise for weeks or even months after the announcement. 3. **Straddle Strategies**: Given HPP's volatile nature and the potential for significant price movements following earnings announcements, a straddle strategy could be effective. This involves buying a call option and a put option with the same strike price and expiration month to profit from a significant price movement in either direction. 4. **Long-Position in Firms with Positive Earnings Surprises**: Traders might consider taking a long position in firms similar to HPP that have experienced positive earnings surprises, especially those in the lowest quintile of earnings surprises, as identified by Brandeis University. In conclusion, traders around HPP's earnings surprise can consider mean reversion, PEAD, straddle strategies, and long-position in firms with positive earnings surprises. These strategies aim to capitalize on the potential for significant stock price movements following earnings announcements.