
We have a few late reporting companies on the earnings front this week with Broadcom (AVGO), Gamestop (GME), Oracle (ORCL), Costco (COST), Adobe (ADBE), Lennar (LEN) and Toll Brothers (TOL) all set to report.
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.