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Earnings Watch: JPM, DAL, & More…
There’s really no way to predict what the report will say or how the stock will react. But we can predict where IV will go post-report.
And that’s DOWN…
Making options incredibly cheap…and prime for an asymmetric trade.
I could talk about earnings season all day – it’s the best time to trade, after all.
- Delta Air Lines Inc. (NYSE:DAL)
DAL was one of the first companies to report earnings this season, and this morning’s report was pretty decent. The company beat expectations and the stock is rising in response. But now, I’m watching implied volatility (IV), because as the pattern goes, it’s going to implode.
I’m watching for a potential cheap option trade to jump on either today or tomorrow in my Profit Revolution trading room, where we’re trading pre- and post-earnings all season long.
- Ark Innovation ETF (NYSEARCA:ARKK)
ARKK is actually an excellent gauge for where volatility could go intraday. Why? Because where this ETF goes, so goes high beta names. That’s why I’ve got a close eye on ARKK today, as I watch market volatility heading into earnings season.
MLK Day’s Effect on the VIX
If the market looks sick, it’s because of ARKK. But remember – there’s a lot more to the market than these mega-cap names.
And we did manage to end the day higher, keeping the VIX light red.
But we’re heading into a long weekend here. The market is closed on Monday in observance of MLK day…
And any time the market is closed, the VIX is affected.
The market’s closure could actually put some extra pressure on the VIX…
Especially as it heads into expiration next week.
That’s why our VIX light is red today… a color I think it’ll stay through next week. But you’ll have to tune in to know for sure!
My Favorite Automaker Steps Up Again
It’s burned me a few times, but it’s also made me a ton of money…
And I just can’t stay away. So, any time I see big money flowing into the automaker, I’m paying attention…
This big-money buyer is going all-in on F with a bullish call spread.
They bought 20,000 of the March 18, 2022 $26 calls for $1.40 a pop, while simultaneously selling 20,000 of the March 18, 2022 $31 calls for a $0.39 credit.
In total, this institutional buyer spent $1.01 per contract – that’s more than $2 million betting that F will run higher over the next two months.
You know I’m long-term bullish on F. But this is a shorter-term trade, with only two months until expiration…
I agree that F is heading higher. But I think it’ll happen even sooner than March…
Which is why I’m looking at the February $25-$30 call spread, buying the $25s and selling the $30s for a quick month-long profit on my favorite automaker.
Founder, Profit Takeover
2 responses to “Incoming – Delta’s Post-Earnings Volatility Crush”
January 13 2022