The week ahead in options. SPY, QQQ, Lululemon, Micron, Gamestop, Chewy and more.


The Broader Markets

Last Week – SPY was higher by about 1.8% on the week, in line with the 1.8% move options were pricing. Implied volatility was lower on the week.

This Week – SPY options are pricing about a 1.5% move this week (about $7 in either direction).

Implied Volatility / VIX – The VIX closed last week below 21. That is its lowest level since early February.

Expected Moves for This Week (via Options AI)

  • SPY 1.5% (about $7)
  • QQQ 2.2% (about $8)
  • IWM 2.1% (about $4.50)
  • DIA 1.2% (about $4.50)


In the News

Meme/story stocks saw an uptick in activity last week, with unusual options volume and in many cases, increases in implied volatility. Here’s some highlights from last week with special focus on stocks that saw spikes in volume and IV. Many of these stocks had reached low dollar levels, so a quick change in sentiment ramps option volume and prices quickly. Increases of option volume vs 30 day average (on Friday), implied vol vs 360 realized vol (on Friday), and IV Rank that was unusual are indicated. This is by no means an exhaustive list but gives a good sense of what was happening as traders turned their attention to these types of stocks after a long lull:

BB: option volume: +600% IV30 vs 1yr: +136%, IV rank: 100% (earnings, expected move this week: 11%)

BBBY: IV30 vs 1yr: +148%, IV rank: 100% (expected move this week: 11.5%)

GME: option volume: +800%, IV30 vs 1yr: +127% (expected move this week: 13.5%)

NKLA: option volume: + 400% IV30, vs 1yr: +127% (expected move this week: 9.5%)

TLRY: option volume + 2300% IV30, vs 1yr: +207%, IV rank: 100% (expected move this week: 20%)

CRON: option volume: 1000% IV:30, vs 1yr +155%, IV rank: 100% (expected move this week: 11%)

ACB: option volume: +2000% IV30, vs 1yr +194%, IV rank: 100% (expected move this week: 17%)

RIOT: option volume: +300% (expected move this week: 9%)

FUBO: option volume: +300% (expected move this week: 8%)

Whether this is a “dash for trash” towards the end of a big move higher in the broader market or the beginning of a turnaround in fortunes for stocks that had been left for dead remains to be seen. But it’s a reminder of how quickly increasing option volume can lead to large leaps in option prices in stocks with a history of “crashing higher.” Here’s a quick look at how many of these names show up on volume scanners from Friday (via Options AI):


Earnings

Links go to the Options AI calendar where you can see the other companies each day and click through to see charts (free to use). Recent earnings moves (actual) start with the most recent:

Monday

Xpeng XPEV / Expected Move: 11.1% / Recent moves: +8%, -1%, -5%

Tuesday

Micron MU / Expected Move: 7.5% / Recent moves: +5%, +11%, -2%

Lululemon LULU / Expected Move: 6.7% / Recent moves: -2%, +10%, +4%

Chewy CHWY / Expected Move: 12.2% / Recent moves: -8%, -9%, -6%

Wednesday

Five Below FIVE / Expected Move: 7.5% / Recent moves: +5%, -13%, +7%

BioNTech BNTX / Expected Move: 8.3% / Recent moves: -7%, +15%, +10%

Thursday

Blackberry BB / Expected Move: 11.1% / Recent moves: +2%, +11%, -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.

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