Hey Traders,
We have now heard earnings from the most influential mega-caps on the market.
The VIX is back above 16 after disappointing results from two of the most anticipated earnings reports: Apple (Ticker: AAPL) and Amazon (Ticker: AMZN).
However, while the VIX may be higher, these two vol measures are much lower …
The CBOE Equity VIX On AAPL (Ticker: VXAPL) and CBOE Equity VIX On AMZN (Ticker: VXAZN) are two equity-specific volatility measures that give us insight into volatility expectations for their respective stocks.
Headed into earnings, both VXAPL and VXAZN both spiked slightly, though overall each was quite a bit lower than recent highs – unsurprising given the recent overall vol conditions, with the VIX was teasing post-pandemic lows.
After earnings, as expected, both AAPL and AMZN vol indexes dropped off, with VXAPL sliding 10%, while VXAZN fell nearly 9%.
Meanwhile, after AAPL and AMZN both reported worse-than-expected earnings, both mega-caps slid around 2% during Friday’s trading session.
This is a great illustration that while overall market volatility can be trending in one direction, it is important for traders to monitor individual equity vol.
These mini-vol measures mean that there are other ways to profit from the volatility related to events like earnings, as they’re a great tool for monitoring expected behavior of certain individual equities or ETFs.
There’s implied volatility indexes for U.S. Treasury Note VIXs, and VIXs for other indices like the Russell 2000.
There’s foreign exchange VIXs – the CBOE EuroCurrency ETF Volatility Index (Ticker: EVZ) is based on CurrencyShares Euro Trust (Ticker: FXE) options …
Even silver … oil… gold … energy … wheat … soybeans … lean hogs and live cattle (yes, really).
Your Only Option,
Mark Sebastian
