Yo Pit Crazies,

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Note below that the SPDR S&P 500 Trust ETF (Ticker: SPY) has hung stubbornly around $436 but the Sigma Vols, that is volatility per expiration term, has jumped and not recovered.  That means the market has not recovered from the geopolitical issues this weekend.  The Mideast is still a mess and this one is no exception

Volatility is a market barometer and right now the pressure is still “Change”.  Not “Rain”like Friday and vol did sell off Monday but not totally. 

The market likes something one day and does not like it the next.  Ultimately, SPY is still near recent highs so there traders are not bailing on stocks, come what may.

10 day SPY with SIGMA vols in the bottom chart, Oct is red

Like I said, what is hot one day is not hot the other days.  Volatility helps chart the course, so to speak.  There is something afoot around these weight loss drugs and it is changing people’s expectations.

Let’s see if there is a vol story.

Eli Lilly Co (Ticker: LLY) is showing the higher IV in a year

LLY makes Mounjaro and the studies have been off the chart.  How does a drug company make big bucks?  Sell something they already have that is “repurposed”.  LLY is hot and folks are looking for a score.

LLY 1 year stock chart with 30 Day IV.

I think the natural run is buying calls into earnings and I would bail after that.  Mark and I will set up trades using our trading engine on Saturday.  That will be a good time to see how this works out.

If you want a deeper dive into stocks like these, vol, and vol trades… our class on Sunday pulls back the curtain on how we find them and how YOU can find them as well. Click here for the details.

To Your Trading Success,

AG