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What You Need To Know In Options This Week

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What You Need To Know In Options This Week

The Markets

The VIX closed the past week below 21, its lowest levels since the market sell-off in March. With that lower level of implied volatility comes compressed expected moves across the major indices.

SPY options are pricing in about a 1.4% expected move into Friday, corresponding to about $358 on the downside and $369 on the upside:

QQQ options are pricing in a 1.9% expected move into Friday, corresponding to about $293 on the downside and $305 on the upside:

Here's a comparison of DIA, SPY, QQQ and IWM for the next month from the Options AI calculator. Low implied volatility makes monthly moves that one would have expected intraday just a few months ago:

From a trading perspective, hedges and outright directional trades using long premium are more dollar cheap now and strategies that rely on short premium or "selling the move" are very dependent on realized volatility, or actual moves, being within much tighter ranges.

Earnings of Note This Week

Expected moves by this Friday, and prior earnings actual moves:

Zoom (NASDAQ: ZM) - Monday AH / 12.9%

Salesforce (NYSE: CRM) - Tuesday AH / 6.7%

Snowflake (NYSE: SNOW) - Wednesday AH / 14%

Crowdstrike (NASDAQ: CRWD) - Wednesday AH / 9%

Splunk (NASDAQ: SPLK) - Wednesday AH / 6.8%

Okta (NASDAQ: OKTA) - Wednesday AH / 6.6%

Ulta (NASDAQ: ULTA) - Thursday AH / 6.9%

DocuSign (NASDAQ: DOCU) - Thursday AH / 8.7%

Cloudera (NYSE: CLDR) - Thursday AH / 12%

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

 

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