THE WEEK AHEAD: PEP, COST EARNINGS; EWZ, CRON, NIO, IQ, MJ
PEP announces earnings on Tuesday before market open; COST, on Thursday, after. Neither presents a particularly compelling earnings announcement-related volatility contraction play, with PEP's rank/30-day implied coming in at 30/18, and COST's at 35/23.
With Brazilian elections taking place a week from today (October 7th), it seems to me that an EWZ play is in order if you haven't already got something on: the November 16th 29/39 short strangle is paying 1.59 at the mid with break evens around one standard deevy -- 27.41/40.59. You can naturally go with an October setup, but implied was over 20% higher out in November (44.0% versus 53.2%) as of Friday close, so you're likely to get a little more juice if you go a touch farther out in time.
On the exchange-traded fund side of things, EWZ comes in at the top of the board, with a rank/30-day implied at 79/50, followed by USO at 65/28, and GDX at 50/27.
Non-earnings high implied: CRON: 71/124; NIO: ~/106; MJ: ~/68.0, and IQ: -/61.4.*
Broad Market Majors Background 30-Day: QQQ: 17.2%; IWM: 15.0%; DIA: 13.6%; EFA: 13.3%; SPY: 11.8%.
* -- Neither NIO, MJ, nor IQ have been around for 52-weeks, so they don't currently have a 52-week range to evaluate. I would note that the options liquidity for MJ isn't the greatest, but figured I would throw it in there since weed is hot, and not everyone enjoys paying the single name roller coaster. The MJ November 16th 40 short straddle is paying a whopping 7.45 at the mid, with break evens at 32.55 and 47.45 ... .
With Brazilian elections taking place a week from today (October 7th), it seems to me that an EWZ play is in order if you haven't already got something on: the November 16th 29/39 short strangle is paying 1.59 at the mid with break evens around one standard deevy -- 27.41/40.59. You can naturally go with an October setup, but implied was over 20% higher out in November (44.0% versus 53.2%) as of Friday close, so you're likely to get a little more juice if you go a touch farther out in time.
On the exchange-traded fund side of things, EWZ comes in at the top of the board, with a rank/30-day implied at 79/50, followed by USO at 65/28, and GDX at 50/27.
Non-earnings high implied: CRON: 71/124; NIO: ~/106; MJ: ~/68.0, and IQ: -/61.4.*
Broad Market Majors Background 30-Day: QQQ: 17.2%; IWM: 15.0%; DIA: 13.6%; EFA: 13.3%; SPY: 11.8%.
* -- Neither NIO, MJ, nor IQ have been around for 52-weeks, so they don't currently have a 52-week range to evaluate. I would note that the options liquidity for MJ isn't the greatest, but figured I would throw it in there since weed is hot, and not everyone enjoys paying the single name roller coaster. The MJ November 16th 40 short straddle is paying a whopping 7.45 at the mid, with break evens at 32.55 and 47.45 ... .