Earnings season continues this weekk, with a couple of big names due to report this week including Netflix (NFLX), Kinder Morgan (KMI), 3M Company (MMM), Charles Schwab (SCHW), American Airlines (AAL), United Airlines (UAL), Verizon (VZ) and Johnson & Johnson (JNJ) 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.
