FB skew looking like a new solar constellation

Originally I was going to call the FB skew the Big Dipper but the shape of the curve is the other way.  We had a little sell off today as the market finally ran out of helium and started to focus on fundamentals.   FB was no different.  After being a poster child for IPO busts FB has launched way above the low 40’s and is looking for new heights.

Blog Image: 

Skew inversion for FB

Today we have another sleepy day moving into the weekend.  As I write this VIX Is up about .18 to 13.15 but probably will not be there for long with the volatility futures hovering just up for the day.  As catalysts go, the consumer confidence number hit a 6 year high and that did not do much to push the market into higher territory.  My closet theory is the US budget talk is coming again and there has been a solid two year history now of how destabilizing that patter can be.  The current back and forth is not what I would call a bullish conversation.  The

Blog Image: 

AAPL is the new MSFT!

Back in the old days before the 3rd QE and Mario Draghi promised to support the Euro the SPX was trading 1329 and the market had one star, AAPL.  Today feels like old is new again with AAPL lovers back after a not awful earnings report and pretty much everything else down.  Gold, bonds, oil and stocks in general all are taking a breather from the recent run and the lack of great news locally gave investors pause.  The strange thing is that Europe actually rallied today on a pickup in demand.  For whatever reason AAPL was again the star and the post earnings

Blog Image: 

Flat Skew into FB earnings

The earnings season has been a mixed bag so far.  Mark commented about it on CNBC yesterday morning and the fact that IV is not really taking off.  VXX is making year lows today and the IV in the SVXY (Pro Shares Short VIX futures ETF) is making a 52 week low today.  Even with VIX cash up the VIX futures compressed a bit.  The only thing cheaper than the IV is the realized volatility clocking in a at 7.27 for the SPX.  The low volatilities seem to set a table for something higher down the road but we will need a catalyst.  The earnings season has not provid

Blog Image: 

GS made its move before earnings

On balance the market looked a little fatigued making record high after record high for the last couple of days.  We had a respectable .3 drop in the SPX and a larger than expected move in the VIX to 14.46 up .68.  The VIX outpaced a bit which generally means there is some nerves about.  The nerves are waiting for a selloff which could happen anytime so earnings will start to get more weight..  Corporate profits have been ok so far so I will be interested to see how long the trepidation lasts.  A company that did report great earnings was GS but the stock w

Blog Image: 

Classic Example of An Earnings Vol Crush: FB Edition

One of the most followed stocks on the NASDAQ, FB, had earnings last night.  There was HUGE volume yesterday ahead of earnings and May3 weekly volatility got to 150% ATM.  FB actually made a decent move by the end of the day today, moving up to near 29.00 a share.  But, those who bought upside calls are probably NOT happy.  Take a look at a shot of the FB May3 29 calls from yesterday.


Blog Image: 

Trading TWX Ahead of Earnings

Today on Bloomberg TV I discussed an earnings trading in Time Warner Entertainment (TWX).  While I am not an expert on cable entertainment, I am an expert on paper flow.  You can watch the video here:


Blog Image: 

Did the FB options out price the earnings?

The big surprise today is that the economy shrank in the 4th quarter of 2012.  The market did not really care most of the day, as the SPX traded a near term high of 1509.54.  The fact that the government is starting to reduce its influence on the economy is probably for the best.  If we get out for just modest declines in GDP, that will bode better in the long term.  Take the short term medicine now versus a big slug in 4 years.  What I think this does is draw a picture of lower

Blog Image: 

The AAPL volatility surface

The market is usually fickle about earnings.  It is always a case of what have you done for me lately.  AAPL is now no exception.  When the future always looked brighter, the name would rally day after day.  Now the stock is really in a tail spin.  Instead of talking about $500 as a buy point, that number is $50 out of the money.  That does not stop the AAPL faithful, and a look at the implied volatility after earnings in this case might be helpful.

Blog Image: 


Subscribe to earnings