Russia Wrecks AAPL’s Party
AAPL pulled every trick in the book with good earnings, a stock split and a buy back. Toss in a dividend boost too for the long suffering shareholders who paid $700. That was enough to send AAPL up $40 today. With good news from AAPL and FB, the SPY was up.40! Not a rousing vote by the rest of the market and it had nothing to do with AAPL.
The Russians came back to foil everything. Just when I thought they signed an “agreement” they are back in Ukraine making a mess. A shooting war on Europe’s boarders has not happened in quite a long time and this was is a bit closer to Europe’s natural gas supplies. The potential for mess is very large.
The market is noting this now by pumping up the ATM IV. Skew is already a bit high but the ATM vol really is not. We are getting the first taste of the weekend staying in the options as the situation gets more tense. Most likely it will be nothing, but you cannot be too sure.
I think we will have a free day of decay on Friday which will pump up short term options artificially. That is, there will be no decay at all unless there is resolution. That might set up a nice double calendar in the index like the SPY/SPX. The idea would be to hold for a week since these Ukrainian Crises usually do nothing. Make sure there is enough room in the double calendar in case the mess gets hotter.
OptionVision™ – data from ORATS
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