Investors hoping for fireworks from Amazon.com Inc.’s earnings report, after a relative dud of a fourth-quarter for the stock, will likely be disappointed, according to the pricing of stock options.
Amazon’s stock was down 0.1% in midday trading. The straddle’s expected move is calculated by adding the price of a call option and a put option, with strike prices closest to the current price and expiring Friday, then dividing that total cost by the stock price. While that might seem feasible on an earnings day for a tech company, the average one-day post-earnings move for Amazon’s stock has been 1.7% over the past 3 quarters, and 3.2% over the past 8 quarters.
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Source: BusinessInsider - 🏆 729. / 51 Read more »