In spite of the fact that I think "the fat lady has sung" for this particular week of earnings (see post below), I did briefly consider playing JWN (Nordstrom) because it came up on the Dough "High Options Volume" grid and shows an IVR/IV of 100/75. It announces earnings on 11/12 after market close.
I looked at Nov 20th expiry setups and don't like what I see, with greater than $1.00 incremented strikes that expand to $5.00 below the 1 SD line on the put side. In fact, there is only one strike between the 1 SD and the 2 SD put lines for that expiry, which kind of indicates to me that while the options may be temporarily liquid, that may not always be the case. If the options were truly liquid all the time, the strike increments would pretty much be consistently $1.00 wide until you got somewhat outside of the 2 SD, where trader interest would decline ... . If you compare and contrast JWN with an extremely liquid issue like AAPL, the difference in strike increments becomes readily apparent: AAPL strike increments are $1.00 all the way to the 2 SD line and then actually narrow to .50 increments below the 100 and 96 strikes for the same expiry.
So, a pass for me on JWN ... .
I looked at Nov 20th expiry setups and don't like what I see, with greater than $1.00 incremented strikes that expand to $5.00 below the 1 SD line on the put side. In fact, there is only one strike between the 1 SD and the 2 SD put lines for that expiry, which kind of indicates to me that while the options may be temporarily liquid, that may not always be the case. If the options were truly liquid all the time, the strike increments would pretty much be consistently $1.00 wide until you got somewhat outside of the 2 SD, where trader interest would decline ... . If you compare and contrast JWN with an extremely liquid issue like AAPL, the difference in strike increments becomes readily apparent: AAPL strike increments are $1.00 all the way to the 2 SD line and then actually narrow to .50 increments below the 100 and 96 strikes for the same expiry.
So, a pass for me on JWN ... .
