Hey Traders,

It’s Andrew Giovinazzi with a look at Apple Inc (Ticker: AAPL) volatility going into earnings.

The short-term implied volatility is mostly looking at earnings next week.

Mark and I thought it was fair to a little low with the upcoming FOMC rate announcement and earnings in the same week. The bigger story is the massive drop in long-term implied volatility as shown below.

The 180 Day IV is taking a massive drop from the madness of 2022.

That means IV for the June cycle is getting revalued quickly as traders start reducing the risk premiums in the longer term.

Usually this happens when more buy writers come back into the market and take advantage of the higher premiums in long term options.

This to me suggests the worst is over for AAPL even though I think the stock is pretty expensive with the flatter earnings picture.

A nine-point drop in IV in a 180 day option is massive and shows a big change in forward expectations.

AAPL is showing the way to lower IV and some longer term VIX puts might play well. Look for more on this in my OP Newsletter for Sunday.

To Your Trading Success,