CHART OF THE DAY: $AAPL Volatility Is At A Particularly Important Spot

08/20/20 07:46AM EDT

Below is a chart and brief excerpt from today's Early Look written by Hedgeye CEO Keith McCullough.

So let’s break that down into particular slice of information that the market is giving us on AAPL this morning:

  1. AAPL’s implied volatility DISCOUNT drooped to -18% (vs. 30-day realized) yesterday, 1-month ago it was +30%

Only 1-month ago you could have bought AAPL at $370/share and made +25%. But you would have been buying it when consensus was buying protection (implied vol PREMIUM of +30%) into an earnings event that they were wrongly pricing as risky!

You can do the math on the market cap gained in a month (TSLA’s market cap did in 1-week what people used to call “peak valuation”). The risk management point here has nothing to do with market cap. It has everything to do with the particular volatility of its price.

The way I read this is the way I look at anything I’m long or short (I’m long AAPL via XLK and QQQ).

CHART OF THE DAY: $AAPL Volatility Is At A Particularly Important Spot - Chart of the Day

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