Option Volatility And Earnings Report For September 3 - 6

Implied Volatility is Rising Ahead of Earnings

The CBOE Volatility Index (VIX), a measure of implied volatility in the S&P 500 index, has been rising in recent weeks ahead of the upcoming earnings season. This suggests that investors are expecting increased volatility in the stock market as companies release their quarterly results. The VIX is currently trading at around 20, which is above its long-term average of 15. Implied volatility is a key input for option pricing, and higher implied volatility typically leads to higher option premiums.

Earnings Season is Here

The upcoming earnings season is expected to be a volatile one. A number of large companies are scheduled to report their results, including Apple, Microsoft, and Amazon. These companies are all heavily weighted in the S&P 500 index, so their results will have a significant impact on the overall market. In addition, the earnings season comes at a time of heightened uncertainty due to the ongoing COVID-19 pandemic and the upcoming U.S. presidential election. As a result, investors are likely to be closely watching the earnings reports for any signs of weakness or strength in the economy.

How to Trade Options During Earnings Season

There are a number of different ways to trade options during earnings season. One common strategy is to buy call options on stocks that are expected to beat earnings expectations. Another strategy is to buy put options on stocks that are expected to miss earnings expectations. However, it is important to remember that options trading is a risky proposition, and it is possible to lose money. It is important to do your own research and understand the risks involved before trading options. Here are some tips for trading options during earnings season:

• Do your research. Before you trade options, it is important to do your research and understand the risks involved.
• Choose the right options. There are a number of different types of options available, so it is important to choose the right ones for your trading strategy.
• Manage your risk. Options trading is a risky proposition, so it is important to manage your risk carefully.

The upcoming earnings season is likely to be a volatile one. By understanding the risks involved and following these tips, you can increase your chances of success when trading options during earnings season.