Yesterday, we commented how we thought AAPL vol looked like a buy (we were right). Well today, if you aren't looking at AAPL and trying to buy premium you are a total jerk, it is that underpriced. VXAPL the VIX of AAPL is at 2 year lows, and if I go back, we are really talking about near decade lows...time to buy
Apple Inc reports earnings tonight, and no one cares. Thats not to say no one, but the big money is sitting it out. No one is buying options into the event. IV30, ahead of earings is in the 15th percentile, and is DOWN today into the announcement. Noticethe difference in IV between this and the last earings report.
AAPL had earnings, and whether you thought it was going up or down there is one thing that seemed off, vol was low into earnings. The AAPL straddle was prcing in a move slightly over 4$. That seemed low to us at option pit. Well...we were right take a look at where the 104/105 strangle went out that expires NOT just this Friday, but on Friday May 27th. The straddle was about 60% too cheap or more.
The comment out of many 'pundits' is that the SPX while selling off, has been quite orderly. I mean, here we are down 100 points in 4 days and the VIX is barely 25%. That said, there is one area of the market that is a bit panicky...aapl investors. Check out the way AAPL vol has completely outpace the trajectory of SPY IV30 over the last couple of days. (AAPL IV30 in red SPY IV30 in blue)