Friday, December 20, 2013

Aqumin Volatility Newsletter 12/20/2013 $AAPL $GLD

AAPL skew is on the move

The fact that we are off to the race again today does not surprise me too much. The good GDP number is being accepted by the market as a good thing. That means the Fed bond buying exercise is getting removed from the equation. Good news is good news again as the Fed starts to exit. I would not be surprised to see higher numbers for stocks in 2014 as global growth starts to pick up.

AAPL was up today. After a nice run, the name pulled back a bit yesterday but toward the close I snapped a shot of the upside curve in volatility using OptionVision™. Note the upslope in IV. The paper and liquidity providers started to bend the curve up as AAPL headed down. Was this the sign of a bounce? It was today. Also, note how the downside volatility sagged yesterday. There was never any conviction to yesterday’s selloff.

12-20-2013 2-26-25 PM

AAPL as a big name stock will fit in a money manager’s portfolio better than GLD at the end of the year. Do not be surprised if AAPL finishes very strong near the high for the year. On a pullback, I like the upside butterflies into the parabolic skew.

OptionVision™ – data from ORATS

Read more from Andrew at Option Pit

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