Option Volatility And Earnings Report For February 16 - 20

Group 1 - Earnings season is slowing down, but significant companies like Walmart, Alibaba, Newmont Mining, Medtronic, Palo Alto Networks, DoorDash, and Occidental Petroleum are still set to report [1] - Implied volatility tends to be high before earnings reports due to market uncertainty, leading to increased demand for options [2] - After earnings announcements, implied volatility typically decreases to normal levels [3] Group 2 - Expected price ranges for stocks can be calculated by adding the prices of at-the-money put and call options, using the first expiry date after the earnings date [3] - Traders can structure their trades based on expected moves, with bearish traders selling bear call spreads and bullish traders selling bull put spreads or using naked puts [5] - Neutral traders may consider iron condors, ensuring short strikes are outside the expected range when trading over earnings [5] Group 3 - It is advisable for traders to use risk-defined strategies and maintain small position sizes when trading options over earnings [6] - A significant move in stock prices should not impact the portfolio by more than 1-3% if a full loss occurs [6] Group 4 - A stock screener can identify stocks with high implied volatility, with filters including total call volume greater than 5,000, market cap greater than 40 billion, and IV rank greater than 50% [7][8]