Tech Companies to Report Earnings, as Silver Remains Volatile and Lags Behind the Rally in Gold
Netflix (NFLX) and United Airlines (UAL) are among the companies expected to release earnings reports this week.
The following shows the largest most notionally traded stocks over the next three weeks in regard to earnings.
Here’s a visualization of changes in the prices of gold and silver during the past year.
Although both are considered precious metals, silver has much greater volatility. That’s shown in the chart above but also in the visualization below of silver's histogram of daily price returns.
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Netflix (NFLX) is the first of the mega cap tech stocks to report earnings. There’s a hefty $75 expected move through the end of this week. If you think it might stay inside that range but want a little less binary risk, moving to FEB will provide a little bit more in management opportunities compared to the weekly. Selling the 775/765 put spread and the 975/985 call spread for $3.20 credit covers roughly a 1 SD move.
The metals have had a nice run during the last couple of weeks with gold outpacing silver. Generally, silver has a higher beta relative to gold. If you think there might be some catch-up here, a zebra trade is a cheap way to get a stock position (100 delta). Buying 2x the 26 calls and selling 1x the 28 call, provides 100 delta for just $3.68 debit, which is roughly 15% of the cash cost to 100 shares!
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Michael Rechenthin, Ph.D., (aka “Dr. Data”), managing director of research and development, has 25 years of trading and markets experience. He’s best known for his weekly Cherry Picks newsletter. On Thursdays, he appears on Trades from the Research Team LIVE.
Nick Battista, tastylive director of market intelligence, has a decade of trading experience. He appears Monday-Friday on Options Trading Concepts Live. On Wednesdays, he co-hosts Johnny Trades. @tradernickybat
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