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Earnings And Options Expiration Equal Extreme Volatility



October 17, 2011 – Comments (0) | RELATED TICKERS: IBM , MS , WYNN

This week countless companies will report their corporate earnings. When the major market moving stocks report earnings it will usually cause a lot of volatility and movement in the important leading stock indexes. Last week, J.P. Morgan Chase & Co (NYSE:JPM), and Google Inc NASDAQ:GOOG) really kicked off the earnings season. Traders and investors must always realize that earnings season will usually make for a very volatile stock market.

Later this week on October 21, 2011 it will be options expiration. Options expiration always makes for a very volatile trading week. During this trading week we will usually see a lot of game playing by the large financial institutions. Traders should watch for a lot of rumors coming out about many leading stocks into the end of the trading week. This is a week when the institutional traders will take the active stocks away from the popular strike prices that were purchased by the small retail options trader. Expect the unexpected during the week of options expiration.

When corporate earnings and options expiration occurs during the same week it creates the perfect elixir for extreme volatility. This week stocks such as Apple Inc (NASDAQ:AAPL), International Business Machines (NYSE:IBM), WYNN Resorts Ltd (NASDAQ:WYNN), and others are scheduled to report earnings, therefore, this week will be very volatile into the Friday expiration.

Nicholas Santiago

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