Option Volatility And Earnings Report For November 27 – December 1

Monday

Nothing of note

Tuesday

CRWD – 7.5%

PDD – 9.6%

Wednesday

SNOW – 9.3%

Thursday

CRM – 5.5%

DELL – 6.6%

MRVL – 7.8%

Friday

Nothing of note

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It’s a quiet week on the earnings front with just a handful on big names companies reporting. This week we have Crowdstrike (CWRD), Salesforce (CRM), Snowflake (SNOW) and Marvell Technologies (MRVL) as the main stock s to watch. 

Before a company reports earnings, implied volatility is usually high because the market is unsure about the outcome of the report. Speculators and hedgers create huge demand for the company’s options which increases the implied volatility, and therefore, the price of options.

After the earnings announcement, implied volatility usually drops back down to normal levels. 

Let’s take a look at the expected range for these stocks. To calculate the expected range, look up the option chain and add together the price of the at-the-money put option and the at-the-money call option. Use the first expiry date after the earnings date. While this approach is not as accurate as a detailed calculation, it does serve as a reasonably accurate estimate.

Last Week’s Earnings Moves

Last week’s we only had one company of interest report earnings:

ZM -0.1% vs 9.2% expected

ADSK -6.9% vs 6.6% expected

BBY -0.7% vs 7.1% expected

DKS +16.5% vs 9.5% expected

LOW -3.1% vs 4.4% expected

MDT +4.6% vs 3.5% expected

NVDA -2.5% vs 7.8% expected

DE -3.1% vs 4.7% expected

Overall, there were 5 out of 8 that stayed within the expected range.

Changes In Open Interest

TSLA, CHPT, AAL, KHC, GM, KVUE, NVDA and UBER saw some of the largest changes in open interest last week.


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