IV in Industrial Names is Crazy Cheap

BY ANDREW GIOVINAZZI

August 2, 2023

Yo Pit Crazies,

Get ready to sign up for my amazing and quite awesome Easy Trade button Service Education Extravaganza next week. If you joined in January, you would have paid for the service 4x over already. Oh Boy!

The other oh boy is that Treasury Yields are spiking again. Nothing like $800 billion-plus to fund Bidenomics for the next 12 months to get yields moving. That is keeping the market stuck below 4600 for the foreseeable future since that is $800 billion of uncertainty hanging over things like a wet blanket. Until it doesn’t.

That also makes IV super cheap in a lot of names.

There is something that could change the mix.

Apple Inc (Ticker: AAPL) earnings will be the big swinger.

AAPL earnings are Thursday night. Also, note that is where the pop in IV is from Thursday to Friday. The market wants these earnings done and over with.

SPY SIGMA vols for this week

Growth is what will take stocks over 4600 SPX. AAPL needs to grow earnings and that is what the market is waiting for. It is also what is holding up VIX and the broader market volatility. That is not the same in individual stocks.

Note the 60-Day Implied Volatility for International Business Machines (Ticker: IBM). That is a two-year low. The current malaise waiting for the AAPL and bond sales are making IV VERY LOW.

IBM 2-year chart with 60-day IV on the bottom

That also means I am moving out on the expiration cycle to September and beyond. I added IBM strangles late in the day Tuesday in class and they were just up by the close. Cheap options move fast when the underlying moves.

More on that in my Easy Button Class next week.

To Your Trading Success,