 What's up navigation traders welcome to today's update today is the first day of the second quarter Wednesday April 1st Starting with today's trade hacker question of the day Question is if IV stays high if implied volatility stays high through earnings season Will we still get the IV crush after the earnings announcements? Just to review, you know implied volatility expands options get more and more expensive as we near Companies quarterly earnings announcement because of the Uncertainty that surrounds that and that's why we can benefit from sell selling options for Earnings players being net sellers of options for these earnings plays is because we get this implied volatility crush right after the announcement and So the question is with implied volatility is still high and so much uncertainty just in the global economic Situation that we're in well. We still get the IV crush after the earnings announcement Let's go to the platform and take a look. I mentioned this yesterday, but a Company that just announced earnings a couple days ago was Restoration hardware ticker RH and so what you'll see here is obviously implied volatility has been pegged up here at a hundred High 90s about the IV percentile IV rank and what you'll see here is after they made the announcement We did get a little bit of implied volatility contraction But definitely not the crush that you would typically see and if I go to a yearly chart I mean here's what I'm talking about. I mean implied volatility gets up in the 90s 100s And then boom just gets crushed in this case in the 80s boom gets crushed In this case in the 80s boom gets crushed So those are the last three earnings announcements and then this one, you know, we're up near a hundred and Got crushed a little bit. I wouldn't call it crush more just an IV contraction But that's what we're likely to see with these upcoming earnings announcements here that are going to be starting here in a couple weeks Is we're still gonna get an IV crush to a point where a lot of the premium is gonna get sucked out of those near-term options Especially if we're trading the options with, you know, one to four days to expiration within the same week of expiration You know, those are those are gonna get crushed because we're getting so close to expiration anyway But some of the further dated options may not contract as much. So that's what we're expecting good question Hopefully that is helpful as we start to come up on earning season here in the next couple weeks So what's going on in the market today? Well, S&P's down a cool, honey We still got about over an hour and a half left in today's session at the time of this recording Dow is down over 700 Nasdaq down to 60 Russell down 73 so what are some of the headlines going on today? What's what's potentially moving the market? Well interestingly enough You know, there's breaking news on one of the not to be mentioned news media sites the breaking news was According to US intelligence The reported numbers on the coronavirus in China are Low, they're inaccurate. I mean, are you kidding? Is that really breaking news? Is it is does anyone actually believe anything China's government says? I mean, we're talking about, you know, a country that is just known for hiding data and Misreporting things to make themselves look good as a as a government. I Mean, I don't I'm not sure why that was breaking news, but I Guess it's just confirmed now is what the situation is So all the all the data and numbers that China has been reporting from the number of coronaviruses from the number of deaths Completely inaccurate completely low compared to what the actual data should be The other thing and this was I saw this yesterday, but according to some some new projections We are expected to see Between a hundred thousand and two hundred and forty thousand deaths in the in the US alone from this I mean, that's trading aside. I mean that that's just scary stuff guys So, you know, gosh, I mean that that's just that's crazy But and that's you know, just kind of projecting out based on you know Where the number of cases is today and what we're gonna see kind of going forward over the next weeks months and so on so Just just a crazy sad sad thing So hopefully none of you all are affected or your families, but you know, just just a sad deal. So You know, and that's that's part of why I just don't think this this market is done with the volatility You know when when you see that kind of impact and you see what that's gonna do Not only from a health perspective But the financial devastation that that's gonna create for families for businesses and everything else I mean just I mean look out below guys. I mean this thing's this thing's going down now We're not gonna get crazy. We're not gonna load the boat on short positions But we're definitely gonna be creating more and more short Delta positions here as we as we have on this little ride up so What did we do today? Well, we we didn't do much We're kind of letting on these last couple days letting these these short Delta plays work for us as the market's going down We did add one iron duck in SPY and we're keeping very small, you know, even though our iron ducks have a big buffer to the downside We've got all the way down to about here and it's just about a week long trade. I mean Obviously price could get there tomorrow, you know, so we don't we're not going crazy here But we do want to start layering in some iron ducks on days that we have On on days where the markets down we're implied volatility expanding and when we you know We're trying to get our break evens as far away from the current price as possible Obviously if this thing does turn and things do we do get some news on things turning for the better in regards to this virus I mean if this thing does rip up we have no risk to the upside in fact We'll book some profits to the upside so that's the cool thing about the duck So that's that's really the only trade we did in our alerts portfolio. If we like take a look at some of the stocks I mean obviously the stocks that are most susceptible to To the social distancing and lack of travel. I mean casinos, you know win down 10% today big move down We've got some short Delta in win Delta Airlines I was looking at earlier. It's having a big down day as well Let's see. Where's it DAL, you know down 15%? I mean these These these stocks are just gonna have a tough time. I mean, it's gonna be a while before people are traveling again Banks getting hammered You know capital one financial down 10% city bank down Almost 8% a lot of I mean just a lot of red across the board here a couple a few things that are having good days grocery stores Kroger Walmart target proctor and gamble, you know, those kind of the consumer staples basically the essential businesses that are still open right now You know, they're having a decent day, but everything else is pretty much in the red So that's all I got for you. Everybody have a great evening and we'll talk to you tomorrow