What is the expected impact of the earnings release on trading volume and liquidity for EARN shares during the call and the following days?

Impact on volume & liquidity

The post‑close earnings drop on 19 Aug will trigger an immediate surge in after‑hours activity as investors scramble to digest the results and any forward‑looking guidance. Historically, an “earnings‑day” release for a mid‑cap REIT such as Ellington Credit (EARN) lifts the average daily volume by 2‑3× the prior 10‑day average, and the liquidity‑adjusted spread tightens as market makers replenish their inventories. The subsequent Wednesday conference call (20 Aug) adds a second catalyst: the live discussion often produces a “call‑spike” where institutional participants and analysts place fresh orders, pushing the intraday volume another 30‑50 % above the already‑elevated after‑hours level.

Trading‑day outlook

• Day‑0 (19 Aug, after‑hours) – Expect a pronounced volume bump (≈ 150‑200 % of the normal daily average) with a temporarily thinner order book as most limit‑order participants are still positioning. Liquidity will be sufficient for block trades but may be fragmented across multiple ECNs, leading to a modest widening of the bid‑ask spread.
• Day‑1 (20 Aug, call day) – The live call typically draws a wave of new buy‑sell orders; volume usually climbs to 1.5‑2× the normal daily average, while the spread narrows back toward its pre‑release level as market makers rebalance. The heightened activity also improves depth, allowing larger‑sized trades with less price impact.
• Day‑2‑3 (21‑23 Aug) – If the earnings beat or guidance is strong (sentiment score 10), the elevated volume and liquidity tend to persist for 2‑3 sessions, gradually normalising as the news is fully priced in. Conversely, a neutral or disappointing release would see a rapid decay in volume and a re‑tightening of spreads.

Actionable take‑aways

1. Pre‑position lightly in the pre‑close window (e.g., 17‑18 Aug) to capture the anticipated post‑close price move without over‑committing before the data is public.
   
2. Monitor the after‑hours tape for the first 30 minutes post‑close; a strong beat will be evident in a rapid price swing accompanied by a surge in trade count—use this as a signal to either add to a winning position or tighten stops.
   
3. During the call, watch for “Q&A” cues (e.g., revised loan‑loss expectations, asset‑sale pipelines). A clear upward‑guidance tone will likely sustain the volume boost, allowing you to ride the momentum on the call‑day’s higher‑liquidity environment. If guidance is muted, consider scaling out as spreads begin to widen again.