BY ANDREW GIOVINAZZI 

July 30, 2023

Each week, I’ll give an overview of a stock and Licia Leslie will follow that up with a chart analysis the next day. Bill Griffo will chime in with macro analysis and Andrew Giovinazzi will then finish out the week with a volatility breakdown.

Have a stock YOU want us to review? Email my team here. – Mark

Hey Traders,

I didn’t see the Barbie movie, but some folks liked it enough to give it some pretty big Box Office opening numbers last weekend. That should be good for Mattel Inc (Ticker: MAT).

Traders did take MAT up from the low 18s to the low 20’s on the back of that news. Earnings were a bit of a fizzle, and the stock is sitting a bit.

1 month MAT chart with 1 day candles

Movies from toys and vice versa is nothing new, and MAT has a few toys they can bring to the big screen. That should be a growth business as long as they do the movies well.

Let’s see if the movie biz is bringing any action to the volatility in MAT.

The Movie Biz Isn’t Providing Any Real Vol Action

There was a vol blip into earnings, which is normal, but since then IV has dropped back to 2 year lows. The stock, on the other hand, is holding well versus the lows of the year. Longer term options are about as cheap as they could get.

Maybe the movie biz breathes some life back into MAT.

I would take this lower IV and just create diagonal call spreads with them. Buy a call more in-the-money farther out and sell a call just out for the money in the short term.

For right now, the lower IV says no one is looking for great things in the near future, great opening for Barbie or not.

Questions about that? Leave a comment below!

To Your Trading Success,

AG