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Putting car & anger issues behind me, tonight’s update is a more ‘traditional’ one. But I would first like to give a shout-out to our good friend WTF pattern that once again reared its egregiously odd head in the last 10 minutes. Nice work, friend.
Besides the last hour, I thought the market had a pretty bearish feel to it. The index option buyers seemed to agree with this, pushing the put/call ratio back above the moving averages to 1.33. First time in over a week that the current reading eclipses all 3 averages tracked. Despite that, it continues it’s week-long useless streak, again indicating no contrarian entries.
Individual Items:
- The theme of lower IV%’s heading into earnings has panned out pretty good so far (i.e. betting against large moves would’ve definitely paid off – case-in-point: AAPL IV% is now at a 12-month low!)
- with a couple notably explosive exceptions: EBAY (+12%) & VMW (-20%).
- 2 ‘losers’ out of the dozen or so ain’t too bad…although, depending trade specifics, those 2 (large) losses might have still outweighed the multiple (small) wins. Of course, that is the downside of options selling strategies…
- F, SLB, VLO continue said theme today
- A few medical buyout rumors for today: AGN, MEDX, XRAY
- With earnings just about a week away, MA is seeing 4:1 call:put action. Volatility remains low, but there seems to be plenty of bullishness to go around. May 170.’s were particularly active.
- For the pure OTB types…STSI headed to trial on patent infringement; tremendous volatility across the board – especially in June, which have priced in a move of 60%+
- Big volume seen again in CDNS May 5.00 calls – another 10k trade going down, although this time with a more bearish look to it than last week. Perhaps they’re no longer wishing to speculate on their upcoming earnings and sold out for a breakeven (won’t know for sure until the new open interest numbers come out…).
