The Broader Markets

Last Week – SPY finished the week well beyond its expected move, down 2.2% vs the 1% move options were pricing. The VIX was up sharply on the week, from below 16 to start the week to above 20 at the close on Friday.

This Week – SPY options are pricing about a 1.6% move (in either direction) for the upcoming week. That corresponds to about $406 as a bearish consensus and $420 as a bullish consensus.

Expected Moves for This Week via Options AI:

  • SPY 1.6% (0.6% more than last week)
  • QQQ 1.8% (0.5% more than last week)
  • IWM 2.5% (0.9% more than last week)

In the News

Markets were lower and volatility was higher at the end of the week. On Friday we wrote about how traders can use debit and credit spreads for bearish positioning or hedging:

For those looking for portfolio hedges or outright directional positioning, options prices are not far off from their historical average. There are numerous ways that traders can protect positions, add yield or place outright bearish directional trades if worried about more selling in the markets.

You can read the full post with examples in SPY here.


Expected Moves for Companies Reporting Earnings

Earnings this week include Plug Power, Nike, FedEx, Blackberry and more.

The Options AI Earnings Calendar is a free resource to keep up to date on upcoming earnings, how options are pricing potential moves, and how that compares to actual moves from prior earnings (starting with most recent). Here is a look at this week’s charts (links go to the Options AI Calendar / Expected move page):

Tuesday

Plug Power PLUG / Expected Move: 8% / Recent moves: -14%, +8%, +15%


Thursday

Carnival Cruise Lines CCL / Expected Move: 5.5% / Recent moves: 1%, -2%


Blackberry BB / Expected Move: 14% / Recent moves: -10%, -16%, -1%


FedEx FDX / Expected Move: 5% / Recent moves: +6%, -6%. +6%


Nike NKE / Expected Move: 4.5% / Recent moves: -4%, +5%, +9%


Friday

Carmax KMX / Expected Move: 5% / Recent moves: -7%, -8%, -11%


Options AI puts the expected move at the heart of its trading experience. Traders are able to quickly generate trades based on the move, or to place their own price target in context of the expected move.

More education on expected moves and spread trading can be found at Learn / Options AI.


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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