alibaba

YHOO BABA Earnings Swap

Tomorrow morning Alibaba reports earnings.  The market is expecting big things because the IV is exploding.  What is interesting is that the IV in Yahoo options is not.  Currently  BABA accounts for about 85% of YHOO's market value.  Thus a pop in BABA options should produce a pop in YHOO options.  But take a look at the two IV charts compared:

Chart - YHOO - Yahoo! Inc._window_screenshot.png

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Is Yahoo worth anything?

We had a pretty listless day today.  VIX down with the SPX down is usually a snoozer, as the market takes a break and evaluates what volatility is really worth now that the printing presses are going full steam.  That moisture you feel in air is the strain of the dollar machine blowing steamy exhaust out of the building.  I guess the Euro theater is now just a spectator sport as the two sides decide what to give and how much to want.  Either way the central banks have committed to throw money at it so the VIX is looking iffy at a 14.18 close.

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