If we follow the waves, there's potentially an opportunity to grab GOOGL stock at a relative discount. This sentiment seems to be broadcasted in the volatility skew.A screener that identifies implied volatility (IV) — or a stock's potential kinetic output — across the strike price spectrum of a given options chain, volatility skew represents one of the first-order (observational) analyses freely available to retail traders. For the March 20 expiration date, the skew is hardly remarkable and that's a major s ...

Microsoft Corp (NASDAQ:MSFT) may rank among the most powerful tech giants in the world but compared to other hyperscalers, MSFT stock has been the worst of the bunch. That's according to prominent investor Chamath Palihapitiya, who is commonly referred to as the "SPAC King." Given the underperformance since the end of November 2022, Palihapitiya asserts that Microsoft has little to show for its investment in OpenAI.Fundamentally, with expectations lowered, it's possible that a lower magnitude of positive ne ...

Core Insights - The analysis of CAR stock options indicates a potential price range between $105.55 and $135.30 by the March 20 expiration date, based on the Black-Scholes-derived Expected Move calculator [1] - The volatility skew suggests that traders are more focused on protecting against upside volatility rather than hedging against downside risks, indicating a belief in potential upside for CAR stock [2][3] - Recent options flow data shows a bullish sentiment, with significant net trade sentiment favoring optimistic positions, particularly noted on February 4 with $562,800 above parity and nearly $197 million on January 15 [4] Earnings Report Expectations - Avis Budget Group (CAR) is set to release its earnings report on February 18, and trading patterns in the options market suggest a non-trivial possibility of an earnings surprise [5] - Despite CAR stock losing approximately 22% over the past six months and starting the new year down more than 6%, certain indicators hint at a potential positive surprise [6] Price Movement Projections - The Black-Scholes model indicates that CAR stock is expected to trade within a range that reflects one standard deviation from the current price, with a 68% probability of staying within this range [7][8] - A probabilistic analysis suggests that CAR stock may move between $115 and $145 over the next 10 weeks, with the highest probability density around $133 [14] Analytical Framework - The Markov property is applied to assess future price movements based on current trends, indicating that the recent pattern of three up weeks in the last ten weeks suggests a specific drift pattern for CAR stock [13] - The analysis acknowledges the limitations of various models, including the Black-Scholes assumption of lognormally distributed returns, while arguing that Markov-based analyses provide a more grounded approach to narrowing uncertainty [15][16][17]

Group 1: Amazon (AMZN) - Amazon's stock has declined by 9% at the start of the year, but this has not deterred smart money as indicated by volatility skew analysis [1] - For the March 20 expiration, the volatility skew shows elevated call implied volatility (IV) compared to puts, indicating a focus on upside volatility protection [8] - The Expected Move calculator projects a price range for AMZN between $194.94 and $225.71, with a probability density peak near $212 [10][11] Group 2: Chewy (CHWY) - Chewy's stock has dropped over 15% since January, with a different volatility skew profile compared to Amazon, focusing on downside risk management [13] - The skew indicates that put IV is higher than call IV, reflecting demand for insurance against tail risk, while also suggesting potential upside tail risk [14][15] - The Expected Move calculator estimates a price range for CHWY between $24.88 and $31.16, with a probability density peak near $32 [16][17] Group 3: Expedia Group (EXPE) - Expedia's stock is down more than 16% year-to-date, and while labeled a Weak Buy, the volatility skew presents an interesting setup [18] - The skew shows elevated put IV at lower strike prices, indicating a concern for downside protection, while call IV rises at higher strikes, suggesting potential upside risk [19][20] - The Expected Move calculator projects a price range for EXPE between $207.55 and $266.15, with a probability density peak around $262 [21][22]

Palo Alto Networks Inc (NASDAQ:PANW) couldn't escape from the fallout in the tech sector amid rising geopolitical tensions. Tensions in the Middle East appeared to influence investors as they shifted away from growth names and into safe havens like gold. Still, cybersecurity represents a non-negotiable element within the broader innovation ecosystem. As such, PANW stock would seem to be a discount — and that's exactly how the smart money is playing it.For the March 20 expiration date, both call and put IV a ...

Core Insights - Walmart Inc (NYSE:WMT) has gained approximately 11% year-to-date, driven by its expanding dominance in essential segments like groceries and healthcare, despite concerns of being overheated [1][2] - The stock has outperformed the S&P 500 and Nasdaq Composite over the past year, with a 24% increase compared to the S&P 500's less than 17% and Nasdaq's 22% [3] Market Context - Walmart's relevance is underscored during economic pressures such as AI disruptions and tariffs affecting discretionary spending, positioning its grocery and healthcare segments as necessities [2] - The current market setup indicates that traders are paying for downside protection, suggesting a cautious sentiment around potential volatility [4] Stock Performance Analysis - The stock's recent performance raises questions, as it is not typically known for high volatility, yet it has shown significant gains [3] - Using Black-Scholes analysis, WMT stock is expected to trade between approximately $117 and $130, with a 68% probability of remaining within one standard deviation [6][7] Future Projections - Over the last 10 weeks, WMT stock has shown a positive trend with seven up weeks, projecting future returns between $121 and $129, with a concentration of probability around $124.50 to $125.30 [10] - A second-order inductive analysis suggests that future probabilities should be assessed in context, similar to how external factors can affect sports outcomes [9] Options Strategy - An aggressive yet rational options strategy is proposed, involving a 124/126 bull call spread expiring on February 20, 2026, with a maximum profit potential of $94 and a breakeven point at $125.06 [12][13]

Unity Software Inc (NYSE:U) generated headlines for all the wrong reasons when its shares stumbled badly following an announcement by tech juggernaut Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL). Google introduced an experimental research prototype powered by its Genie 3 world model that enables users to create and explore interactive worlds. Undergirded by artificial intelligence, it appears to be another example of high-level disruption, which cratered U stock.Essentially, the fear is that Genie 3 can usher i ...

Irrespective of your goals in the market, it’s always useful to consider the volatility skew of your favorite optionable securities. Volatility skew is a screener that identifies implied volatility (IV) or a stock’s potential kinetic output across the strike prices of a given options chain.Even more significantly, the pensiveness isn’t just a narrative interpretation; rather, it has had a serious impact on how options traders have structured risk in Exxon Mobil stock.Now, it’s true that over the trailing fi ...

Core Viewpoint - Micron Technology Inc (NASDAQ:MU) is experiencing significant upward momentum, with stock prices soaring, but concerns about overvaluation and potential volatility persist [1][2][3]. Financial Performance - MU stock has increased by 38% year-to-date, reflecting strong market sentiment despite high trading multiples [2]. - Analysts have praised Micron's recent earnings report, highlighting robust memory chip pricing and a multi-year supercycle in artificial intelligence and data-center spending as key growth drivers [2]. Market Dynamics - Historically, memory pricing has been subject to boom-bust cycles due to production ramp-ups, leading to skepticism about MU's ability to maintain its current momentum [3]. - The advent of AI has changed the demand landscape, stabilizing prices and encouraging institutional investment, which may justify current valuations [4]. Volatility and Options Analysis - There is a notable increase in put premiums, indicating that traders are buying downside protection due to concerns about potential volatility [5][6]. - The Black-Scholes model predicts an expected price range for MU stock between $340.82 and $449.86 by February 20, reflecting market volatility [8]. Future Projections - Based on recent performance, MU stock is expected to range between $380 and $440 over the next 10 weeks, with a peak probability density around $408 [10]. - A contrarian investment strategy is suggested, with a focus on a bull call spread that could yield significant returns if the stock rises above $410 [14].

Company Overview - Marvell Technology Inc (NASDAQ:MRVL) is currently facing pressure, with its stock down 5% since the beginning of the year, and an unconvincing trajectory since October. However, the company's potential for recovery should not be overlooked [1]. Geopolitical Context - The geopolitical situation surrounding Greenland, particularly the U.S. administration's stance, has led to significant volatility in global equity markets. This situation could result in either a trade war or a more severe conflict, impacting market stability [2][4]. Investment Insights - Despite the geopolitical distractions, investment in artificial intelligence and infrastructure upgrades is accelerating, which may present a buying opportunity for MRVL stock during downturns [5]. - The implied volatility for MRVL's options chain as of February 20 is 50.73%, indicating a wide price target range between $70.89 and $88.55, reflecting a significant 11% high-low spread relative to the current price [6][7]. Price Projections - Historical analysis suggests that MRVL stock could see a price range between $76 and $88 over the next five weeks, with a peak probability density around $83 and $85 [11]. - A specific trading strategy involving a bull call spread (buying the $83 call and selling the $85 call) is proposed, which could yield a maximum profit of $117, representing a 141% return if the stock rises above $85 at expiration [12][13]. Statistical Analysis - The analysis indicates that MRVL stock is likely to end between $83 and $85 based on historical patterns, enhancing the credibility of the proposed trading strategy [15].