This week in options. Tesla, Zoom, Nvidia, Salesforce and more.


The Broader Markets

Last Week – The SPY was lower by 1.3% last week, in line with the 1.4% move options were pricing. That pullback followed a 3.3% move higher the week before and a 15%+ move off the recent lows. Implied volatility rose slightly.

This Week – SPY options are pricing a 1.7% move for the upcoming week.

Implied Volatility / VIX – The VIX closed the week near 21, up from 19 the week prior. VIX futures remain steeply curved with December futures near 27 and Jan 2023 and beyond months above 28,

Expected Moves for This Week (via Options AI)

  • SPY 1.7% (+/- $7)
  • QQQ 2.3% (+/- $7.50)
  • IWM 2.2% (+/- $4)
  • DIA 1.4% (+/- $4.50)


In the News

Over the weekend Tesla (TSLA) announced a 25% increase to the price of their “full self-driving” software. Tesla shares are up 40% from recent lows and off about 5% from recent highs. Over the past year Tesla stock has seen multiple 20%+ rallies that take place over 3-4 week spans. The most recent rally from July 15th to August 15th was the largest of those moves percentage-wise. Since the all time high in Nov of ’21 the stock has put in two lower highs at the apex of these sharp rallies, first in January, then in April. The last large move lower in the stock that happened from early April to mid May saw the stock down more than 50%.

As stated before, Tesla stock has seen moves way beyond option pricing on a consistent basis for the past year, both higher and lower. Here’s a look at the past year’s moves as compared to the current expected move in the options market. Options are pricing about an 11% move over the next month, and only about a 25% move out to January, much less than the types of moves the stock has seen over the past year:


Education

We’ve covered credit spreads the past few weeks and will be featuring some content about debit spreads for directional trading over the next few weeks. We also wanted to point out some short videos recently posted to Learn that can help serve as a resource on some of the spread strategies we’ve been discussing. Click the link to have a look:

6 Option Spread Strategies to Know


Earnings

Links below 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

  • Zoom ZOOM / Expected Move: 12.2% / Recent moves: +6%, -7%, -15%
  • Palo Alto Networks PANW / Expected Move: 7.5% / Recent moves: +10%, 0%, +2%

Tuesday

  • Macy’s M / Expected Move: 10.5% / Recent moves: +20%, -5%, +21%
  • Nordstrom JWN / Expected Move: 12.3% / Recent moves: +14%, +38%, -29%
  • JD.com JD / Expected Move: 6.4% / Recent moves: +4%, -16%, +6%
  • XPENG XPEV / Expected Move: 8.3% / Recent moves: -6%, -0%, +8%

Wednesday

  • Nvidia NVDA / Expected Move: 5.9% / Recent moves: +5%, -8%, +8%
  • Salesforce CRM / Expected Move: 6.4% / Recent moves: +10%, +1%, -12%
  • Snowflake SNOW / Expected Move: 10.8% / Recent moves: -5%, -15%, +16%
  • Autodesk ADSK/ Expected Move: 6.5% / Recent moves: +10%, +1%, -15%
  • Splunk SPLK/ Expected Move: 8.3% / Recent moves: +10%, +6%, +5%

Thursday

  • Peloton PTON / Expected Move: 19% / Recent moves: -9%, +5%, -35%
  • Workday WDAY / Expected Move: 6.7% / Recent moves: -6%, +5%, -4%

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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, member FINRA and SIPC.

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