Earnings season continues in earnest with some big names reporting including Tesla (TSLA), Taiwan Semiconductor (TSM), Johnson & Johnson (JNJ), Bank of America (BAC), Netflix (NFLX), United Airlines (UAL), Goldman Sachs (GS) and Morgan Stanley (MS).
Before a company reports earnings, implied volatility is usually high because the market is unsure about the outcome of the report. Speculators and hedgers create huge demand for the company’s options which increases the implied volatility, and therefore, the price of options.
