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One high risk, high potential reward strategy I like to do is either go long or short stocks ahead of their earnings report as there tends to be increased volatility after a report. A correct guess on direction could be large quick percentage profits. But of course, it could also lead to large quick percentage losses so some research is needed to improve one's odds. Here is a preview of some ideas for December 3, 2012 that may warrant further research:

(1) Casella Waste Systems (NASDAQ:CWST) - after hours

CWST is a a regional solid waste, recycling, and resource management services company. They are losing money with a really awful balance sheet and were almost out of cash except they did a heavily dilutive package at the end of the quarter. They are forecasted to continue to lose money through fiscal 2013. A number of insiders were dumping over the summer, although their CFO made a purchase recently but it was only a fraction of his salary and around a time they were doing a large financing at a steep discount. I don't see any upside even realistically possible with this report.

Here's what I would do: short the CWST ahead of earnings.

(2) Conns (NASDAQ:CONN) - pre-market

CONN is a small electronics, appliance, and furniture chain located mostly in Texas. They have been doing the opposite of Best Buy (NYSE:BBY) and doing so consistently. They are growing top and bottom, often surprising the street, and the stock has been on fire all year. They preannounced awesome same-store sales and margins and are opening new stores. I don't like the insider selling or that the stock is already up so much but the numbers and estimates justify an even higher stock price. Expect great guidance with the earnings report.

Here's what I would do: buy CONN long ahead of earnings.

(3) LDK Solar Co., Ltd. (NYSE:LDK) - pre-market

China. Solar. I can almost stop there. This company is on life support bleeding red ink and expected to report an enormous year over year decline in sales and EPS. It's been falling all year, and I expect the fall will continue.

Here's what I would do: buy a tiny bit of the $1.00 Dec puts for a nickel and see if it crashes by expiration. Risk is 100% of course but potential could be 100-300% gainer, possibly more.

(4) Pep Boys - Manny, Moe & Jack (NYSE:PBY) -- after hours

Manny, Moe, & Jack -- can you not love them? But seriously, as you probably know, they are an auto service and repair chain. They appear fairly valued based on earnings and forecasts, but in terms of value they hover right around book value so the downside risk appears minimal. They have missed estimates a few times this year and the stock has paid the price (literally) for it.

Chart forPep Boys - Manny, Moe & Jack (<a href=

Here's how I would play this one, especially after looking back at the chart: wait for the earnings report first. If the report surprises to the upside enough, jump in after the report and ride it for a few days to a couple of weeks. This one historically has been one that can be bought after the good news, if it comes, and ride it to glory. Probably because despite it being a household name, not a lot of people are watching the stock so it's been easy to get a leg up on Wall Street.

Source: Earnings Trade Ideas Ahead Of Dec. 3