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

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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

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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.


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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:


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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

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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.

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Kersplat goes the implied volatility in FB now what to do?

We have spent a lot of time in this blog chronicling the movement in Facebook.  I think the stock has been a really good trader except of course for the $38 buyers on the IPO.  It feels like nobody wanted the stock at $19 either because all the initial investors were getting out.  Some did for sure as was reported today but by and large there is a big group of holders not quite ready to hit the bricks yet.  The lockup expiration dates have been the great buying opportunities of the year for this name.  I guess the point is that when things are telegraphed t

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AAPL Earnings Straddle is Really Juicy

We all know that AAPL has had a rough couple of months.  The stock has moved up and down 200.00 in the last 6 months.  The company has earnings next week and I wanted to put into perspective how much the fear is priced into options right now.  Take a look at this chart of AAPL stock and IV.


Livevol (r) www.livevol.com

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I liked the special title there for our blog tonight.  For the most part the activity in the volatility markets was pretty muted today.  On balance some decent earnings but nothing to light a candle under the big indexes.  The NDX was up about .33% so the CES show was not exactly lighting a candle under the technology stocks.  I was reading a column in the WSJ not so long ago that the next technology innovations won’t be enough to spur economic growth or some sort of nonsense like that.  Some professor was espousing this idea and it reminds me of a quote from the head of the US Patent Offic

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