How to use performance period for options trading.
Implied volatility of options is the expected price change of a certain stock on performance day. Market traders can use it to speculate the value of options. In addition, looking back at the stock price performance on performance days can also determine its specific trading patterns or rise and fall situations.
Options strategies based on volatility.
When options are overvalued and stock prices are still within the expected range, arbitrage can be carried out based on the short-term volatility of IV crush. Common short-term volatility strategies include iron condors, selling straddles, and selling wide straddles.
Earnings release date: after market on August 5.
Q2 revenue forecast is $652 million, up 22.33% year-over-year; EPS is $0.03, up 245% year-over-year.
The current implied volatility of Palantir is ±13.6%, indicating that the options market is betting on a daily change of 13.6% after the performance is released. In comparison, its share price changed by about 17.1% after the past four earnings releases, indicating that the current option value is slightly undervalued.
In the past 12 performance days of Palantir, its probability of decline is 58%, and its volatility often exceeds market expectations. Therefore, the most effective strategy is to use bull spreads options, with a win rate of about 75%; In addition, in the latest four performance days, Palantir has a higher probability of decline, with respective closings of -5.3%, +17.2%, +30.8%, and -15.1%.
From the skewness of option volatility, the current market tends to put options on Palantir. Looking at the option transactions last Friday, the put option with a strike price of $20 and due this Friday is being purchased, with a trading volume and open interest both above 0.01 million contracts.
2,$Super Micro Computer (SMCI.US)$
Earnings release date: after market on August 6.
Q2 revenue forecast is $5.305 billion, up 142.83% year-over-year; EPS is $7.83, up 128.31% year-over-year.
The current implied volatility of Super Micro Computer is ±13.8%, indicating that the options market is betting on a daily change of 13.8% after the performance is released. In comparison, its share price changed by about 10.8% after the past four earnings releases, indicating that the volatility is expected to increase this time.
In the past 12 earning days of Super Micro Computer, the probability of going up is relatively high, about 75%; however, in the past four earning days, it has fallen three times, with changes of -23.4%, -2.4%, +3.5%, and -14%, respectively.
From the skewness of option volatility, the current market is slightly bearish on Super Micro Computer.
Earnings release date: August 15, 2025.
Q1 revenue forecast for fiscal year 2025 is 247.3 billion yuan, up 5.6% year-over-year; EPS is 12.08 yuan, down 9.2% year-over-year.
The current implied volatility of Alibaba is ±6.5%, which is roughly equal to the change in its share price after the past four earnings releases. Among the past 12 earning days of Alibaba, there is a relatively high probability of falling, about 67%. In the past four earning days, three of them recorded falls, with changes of +4.6%, -9.1%, -5.9%, and -6%, respectively.
From the skewness of option volatility, the current market tends to put options on Alibaba.
How to easily play with performance options? Futu options tool can help you!
>>Good use of volatility analysis to determine the level of options valuation!
>>Option calculator, calculates the theoretical price of future options
Disclaimer
This content does not constitute an offer, solicitation, recommendation, opinion, or guarantee of any securities, financial products or instruments. The loss risk of buying and selling options could be substantial. In certain circumstances, you may suffer losses exceeding the amount initially deposited as margin. Even if you set up backup instructions, such as stop loss or limit instructions, losses may not be avoided. Market conditions may render such orders impossible to execute. You may be required to deposit additional margin in a very short period of time. If the required amount cannot be provided within the specified time, your open contracts may be closed. However, you are still responsible for any shortfalls in your account arising from this. Therefore, before buying or selling, you should research and understand the options, and consider carefully whether such trading is suitable for you based on your financial situation and investment objectives. If you buy or sell options, you should be familiar with the exercise of options and the procedures at expiration, as well as your rights and obligations when exercising an option or at expiration.
Editor/new