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Not always will the stock go down. Kohl's KSS for example: Why would Kohl's (KSS) slash its dividend after raising it just two months ago, and why would the stock go up on the same day as the announcement? These are strange times and this is a strange case. Here's why: Kohl's announced that...

The implied dividends measure the options market view on how much companies will pay going forward. Embedded in options prices are a portion of forecast dividends traders think will be paid. When the implied dividend falls to low levels, this behavior warns investors that the dividend level may...

Why would Kohl's (KSS) slash its dividend after raising it just two months ago, and why would the stock go up on the same day as the announcement? These are strange times and this is a strange case. Here's why: Yesterday Kohl's announced that is secured a $1.5 billion revolving line of credit...

Week 4 of earnings season starts today and should inject volatility into the market. Week 4 typically surprises with stocks moving more than expected by the options market. Shopify $SHOP, Roku $ROKU, Beyond Meat $BYND, Uber $UBER, Disney $DIS, Pinterest $PINS, Buffalo Wild Wings $WING, and Wynn...

Royal Dutch Shell cut its dividend 66% to $0.16 from $0.47 this morning. This is the first time Shell has cut its dividend since WWII. The stock is trading down 13% in pre-market as the dividend cut was much larger than expected. Shell is the biggest dividend in the FTSE-100 and this cut is a...

Here are the IV for the 5 delta 1 year and 25 delta 1 year from our options API: Especially the way OTM have fallen sharply. To your question do traders think the market will fall: here's a graph of the 50 delta / 25 delta 1 year IV: The third graph from the bottom shows this ratio. As the...

The options straddle expects NFLX to move $28.57. From the after hours -<1% it looks like that straddle is going to hurt the longs. IBKR after its WTI customers cost it $88 mil is down $3.70 where the straddle was expecting a $2.70 move.

Watch the implied volatility, now back over 40% for SPY. If IV holds there, that could spell trouble for the market.

Yes. In 2008 after the initial drop and small recovery, the market grinded lower on lower IV.

Matt Amberson of ORATS in a Reuters Article The first-quarter earnings season could also ratchet up market turbulence, especially when smaller, more volatile companies report results, said Matt Amberson, principal at ORATS.“We’re not out of the woods from a volatility standpoint,” he said. See...

Agreed, it is tough to catch a turn. But today is a good sign, IV up to 37% after bouncing off 33% yesterday. If this holds the down-trend in IV may be over and a headwind for the market.

Not quite. IV has been falling and supporting this bull run. If implied turns and breaks the down-trend, that would be bearish. Also, as mentioned, earnings are going to be a bigger deal than people realize. The firms reporting now are historically not very good for options straddle holders, ie...

Look at the implied volatility trend. If it breaks this down-trend, this bull run of ~25% may be over.

I think weeks three and four of earnings season are going to be wild given the movement usually seen and will cause a kink in this market.

JNJ up $5 in the pre-market with ORATS earn move report expecting a $2.82 move in the stock as implied by straddle prices. https://blog.orats.com/dividend-suspensions-and-one-increase-jnj

Johnson & Johnson ($JNJ) announced earnings this morning and raised its dividend 4%. JNJ is up 3% in pre-market trading. The earnings straddle was expecting a move of $2.82 today so pretty close to the pre-market move. The options market was not expecting the dividend ex date at 5/22/2020 (ORATS...

As earnings approach, we are seeing big implied earnings moves compared to past earnings moves (green bars) especially in Schwab ($SCHW), Citi ($C) and the other banks ($WFC $USB $BAC $JPM). https://info.orats.com/earnings

The implied vol crunch is not as painful when realized is moving so much. Also, when you find good term structure and slope spread trades, you can mitigate those effects.

The good news is that with SPY implied volatility about 37% and realized (historical/statistical) vol moving at 55% you don't have to be to exactly right to profit from scalping gamma. I like to find verticals to buy in these cases where they make the most sense from a term structure and...

Don't fight the Fed, right? How long can they do this? The good news for options owners is that the realized (historical/statistical) volatility is still about 55% measured over the last five trading days so you can scalp gamma and still stay afloat until what I think will be a messy ending to...