The week ahead in options. SPY, QQQ, Tesla, JP Morgan, Wells Fargo and more.


The Broader Markets

Last Week – SPY finished last lower by about 1.9% (or about $9). That was more than the 1% move options were pricing.

This Week – SPY options are pricing a 1.3% move (about $6 in either direction) for the upcoming week. With the SPY around $466 that is a range of about $460 to $472.

Implied Volatility – The VIX ended Friday just under 19, higher on the week. Expected moves for this week are near historical averages.

Expected Moves for This Week (Via Options AI)

  • SPY 1.3% (about $6)
  • QQQ 2.1% (about $8)
  • IWM 2.3% (about $5)
  • DIA 1.3% (about $5)

In the News

Last week we highlighted the range options were pricing in Tesla into its first trading day after new vehicle numbers:

“TSLA stock finished 2021 at around $1060, in the middle of a range for the final 2 months that saw highs above $1200 and a low just below $900. Tesla is set to report earnings the last week of January. Options are not pricing movement outside of that recent high or low until February. Here’s how that range translates into a $25 wide Iron Condor expiring Feb 18th, about a $1400 risk to $1000 reward profile (via Options AI):

TSLA made a big move higher right to the 1200 level to start last week. It failed there and pulled back sharply from that level and actually finished lower on the week overall. With the stock now $1027 its expected move for this week is roughly 6%, with consensus levels around 1090 and 960, and the expected move out to February 18th about 15%, with consensus levels around 1180 and 870.


Earnings

Earnings season begins this week, highlighted by reports from some big banks on Friday. Links go to the Options AI calendar, free to use and search for other names.

Monday

Tilray TLRY / Expected Move: 11.8% / Recent moves: +2%, +22%, -7%

Thursday

Delta Airlines  DAL / Expected Move: 4.2% / Recent moves: -6%, -2%, -3%

Taiwan Semiconductor  TSM / Expected Move: 5.1% / Recent moves: +2%, -6%, -2%

Friday

JP Morgan Chase  JPM / Expected Move: 2.5% / Recent moves: -3%, -1%, -2%

Citi C / Expected Move: 3.1% / Recent moves: +1%, 0%, -1%

Wells Fargo WFC / Expected Move: 3.6% / Recent moves: -2%, +4%, +6%


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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