Continuing Education: Stock Analysis Report


DiscoverOptions mentoring students, including those in our DiscoverOptions Continuing Education Program , have access to a fantastic tool called the Stock Analysis Report.

Earnings announcement provide opportunity for options trading profits due to flattening implied volatility skews. To discern an options trading opportunity, the next step is to survey how past earnings announcements have impacted the horizontal volatility skew as well as overall MIV levels. Do the skews flatten-out completely? Do the back months' MIV level rise or fall and by how much?

They then use that information to construct a calendar spread that has a statistical edge that is most likely to profit after earnings are announced and the front and back month MIV levels snap closer together.

 

The illustration below shows a sample report generated for Apple Inc. (Symbol: AAPL)