Although the earnings season has already kicked off modestly, a bevvy of financials announce next week: C, JPM , and WFC (all on Friday). I generally don't play these underlyings for volatility contraction around earnings primarily because the implied volatility just doesn't ramp up to the degree I'd like to see for a play. I thought I'd mention them here since there will be possible broad sector ( XLF ) impact depending on how these earnings go -- i.e., there could be a play that develops in one of these underlyings post-announcement or in the sector as a whole that may be worth playing.

Other Earnings: DAL (rank 41/30-day 32) announces earnings on Thursday before market open. The metrics don't look promising here for a directionally neutral premium selling play, but I could see going for something bullish if earnings experience engine failure and crash into the 52-week low around 48 and implied volatility remains high such that a bullish assumption play would be productive (e.g., short puts, Jade Lizard, etc.).

Although there are some other single names that are "ripe" for a volatility contraction play right here ( TSLA ( earnings in 31) comes to mind), my general tendency is to resist the urge to put plays on in single name with earnings announcements that are near the monthly and instead wait until the eve of the announcement. With a rank of 99 and implied of >100%, though, it's understandably tough to sit on one's hands and wait.

On the Exchange-Trade Fund Front:

Brazil is voting today, so it's likely that you're too late to get into a volatility contraction play that may evolve after the results are finalized (the time to have put that play on was last week). That being said, it's also possible that EWZ gets even more volatile depending on the outcome, even though implied volatility is at the top of its 52-week range at 56.2%.

The financial media has returned to covering 10-year T note yield hand-wringing and/or the spiking of bond yields in general as a general, explanatory theme of why the broad market gave some up last week. TLT broke through long-term support at 116 last week, cratering to 113. I was previously shorting TLT from the 122 level via put diagonals, but it appears that play may have temporarily played out in the absence of some risk-off event that drives treasuries back up. I will continue to short TLT on retrace, but there is little that sticks out to me in terms of horizontal resistance other than 122 and 116, and I'm hesitant to short from 116, since it literally just broke that level "seconds ago" in the scheme of things.


I registered to Tradingview just to follow your posts. Thank you for the informative read every week.
NaughtyPines bingo0320
@bingo0320, Thanks. I figure if I'm going to do it for myself anyway, I might as well post it. If it helps someone out, all the better ... . :)
Oops and thanks for another great weekly analysis!
Re TSLA guess on earnings related and max IVR have no problem waiting til the eve of announcement as we see new 52 week highs in IV just like we do price. I sometimes place a 1-3 week BWB when premium rich enough to place an edge of expected move BWB that will credit decent. WMT has earnings coming up IVR Friday was ~44 and looks headed down or flat for now so put a BWB in front of it (calls - bearish no risk downside) credit 44 max win 94 loss 156 POP 70, P50 74 WMT spot 93.31 breakeven ~96.30 - these have worked okay for me but looking at near dte/time as much as IVR and expiration before earnings announce date..
NaughtyPines Tom1trader
@Tom1trader, Awesome. Good metrics on that setup. TSLA: Every time I go to put something on, I get somewhat frustrated with the width of the markets -- requires some patience and a bit of price discovery to get a decent fill on a defined risk ... .
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