
Earnings season is slowing down, but we still have a few big names reporting. This week, we have Alibaba (BABA), Home Depot (HD), Walmart (WMT), Cisco (CSCO) and Deere & Company (DE) all reporting.
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.