The Broader Markets
Last Week – SPY was higher by about 1.6% (or $7.40) last week, more than the 1% move options were pricing.
This Week – SPY options are again pricing about a 1% move (or just less than $5 in either direction) for the upcoming week. With the SPY just under $460 that corresponds to just above $464 on the upside and around $455 on the downside.
Implied Volatility – The VIX ended Friday around 16.20, up slightly from the week before. The VIX remains below its historical average entering this week.
Expected Moves for This Week via Options AI:
Options are pricing similar market moves this week than they priced last week. Here are the expected moves for the week in the major ETFs:
- SPY 1%
- QQQ 1.5%
- IWM 1.7%
- DIA 1.1%
As an example of how the 1% expected move translates into strike selections, here’s an Iron Condor with short strikes set at the expected move (based on the close Friday). It would need the ETF to finish between $455 and $464 to see Max Gain:
In the News
The FDA gave to go-ahead for a lower dose Covid vaccine from Pfizer (PFE) for ages 5-12. Moderna (MRNA) announced that the FDA needed more time to review its vaccine for the same age group. Both companies report earnings this week. Options are pricing about a 7% move this week and roughly a 13% move for the next month in Moderna.
Expected Moves for Companies Reporting Earnings
Options AI puts the expected move at the heart of its trading experience. Traders are able to quickly generate credit and debit trades based on the Expected Move, or to their own targets in context of the Expected Move. More education on Expected Moves and options trading can be found at Learn / Options AI.
The expected moves below are for this Friday and link to the Options AI Calendar. Recent moves on prior earnings start with the most recent quarter.
AMC AMC / Expected Move: 10.2% / Recent moves: -6%, +6%, +4%
Zillow Z / Expected Move: 8.5% / Recent moves: -8%, -6%, +18%
Activision Blizzard ATVI / Expected Move: 4.8% / Recent moves: +2%, +2%, +10%
Roku ROKU / Expected Move: 7.7% / Recent moves: -4%, +12%, +3%
Qualcomm QCOM / Expected Move: 4.5% / Recent moves: +6%, +5%, -9%
Fastly FSLY / Expected Move: 11.7% / Recent moves: -10%, -27%, -15%
Etsy ETSY / Expected Move: 8.5% / Recent moves: -10%, -15%, +12%
Moderna MRNA / Expected Move: 6.7% / Recent moves: -1%, -1%, +2%
Square SQ / Expected Move: 4.5% / Recent moves: -2%, +4%, -8%
Pinterest PINS / Expected Move: 9.1% / Recent moves: -18%, -15%, +5%
Uber UBER / Expected Move: 7% / Recent moves: +3%, -9%, -4%
AirBNB ABNB / Expected Move: 6.2% / Recent moves: +1%, +4%, +13%
Peloton PTON / Expected Move: 8.2% / Recent moves: -9%, 0%, -6%
Cloudfare NET / Expected Move: 9.8% / Recent moves: -2%, +4%, -6%
DraftKings DKNG / Expected Move: 6.4% / Recent moves: +6%, +4%
Based upon publicly available information derived from option prices at the time of publishing. Intended for informational and educational purposes only and is not any form of recommendation of a particular security, strategy or to open a brokerage account. Options price data and past performance data should not be construed as being indicative of future results and do not guarantee future results or returns. Options involve risk, including exposing investors to potentially significant losses and are therefore not suitable for all investors. Option spreads involve additional risks that should be fully understood prior to investing. Securities trading is offered through Options AI Financial, LLC a registered broker-dealer.