Market Movements

^{*Weekly Return is calculated as market open of the previous Wednesday, to market close this Tuesday (yesterday); Current Level is Tuesday’s (yesterday’s) close.}

Weekly Watch

• Nvidia Reports After the Close Today — A big market test of whether demand for AI infrastructure remains strong. Watch its data-center results and future guidance.

• Big Economic Numbers This Morning — PCE inflation, updated GDP and durable-goods orders all arrive at once. These could quickly change expectations for rates and economic growth.

• Software and Cybersecurity Report — Salesforce, CrowdStrike and Okta will show whether businesses are turning heavy AI investment into real software demand.

• The Retail Check Continues Thursday — Best Buy, Dollar General and Ulta will reveal whether consumers are still spending freely or beginning to pull back.

• Honorable Mention — Dolly Parton passed away yesterday. RIP to an absolute legend.

Thought Throttle

We’ve all heard someone say that something is already “priced in.”

The Fed is expected to cut rates? The Market has already priced it in.

A company is expected to crush earnings? It’s already priced in.

Everyone knows the economy is slowing? Already priced in.

But what does this actually mean?

At its simplest, stocks don’t just react to whether news is good or bad. They react to whether that news is better or worse than what investors already expected.

Imagine a company is expected to grow earnings by 20% this year. Investors are excited about it, and the stock has risen because people expect that growth to continue.

Then the company reports 15% growth.

That’s still pretty good. The company grew earnings 15%. But the stock could likely fall.

Why?

Because investors weren’t paying today's price for 15% growth. They were paying it expecting 20%.

The opposite can happen too.

Imagine a struggling company is expected to lose $2 billion. Everyone knows things are bad. The stock has already been beaten down because of it.

Then the company reports a $1 billion loss.

Still yucky. But not as yucky.

The stock might actually rise because the result was less terrible than everyone expected.

That’s the basic idea behind something being “priced in.”

And expectations obviously matter.

The market is constantly trying to figure out what happens next.

Today's stock price doesn't only reflect what we know about a company today. It also reflects what investors expect from that company tomorrow.

That is a big reason we get headlines like:

Company beats earnings. Stock falls 8%.

Company reports awful results. Stock jumps 12%.

Sometimes the actual result just wasn't as good—or as bad—as what was already expected.

This becomes especially important when we're trading options.

Say a company has earnings next week and everyone expects a big move.

Option premiums might become unusually expensive beforehand, because there is expected to be a big move.

When this happens, the premiums start tempting us.

But there's usually a reason we're getting paid more—uncertainty is being priced in.

The market doesn't know whether the stock will move up or down, but it can price in the possibility that it moves significantly.

That's part of why implied volatility tends to rise around major events like earnings.

So, remember, that bigger premium has pros and cons.

“Priced in” is also why predicting what happens isn't always enough.

We could correctly predict that a company will report great earnings and still be completely wrong about how its stock reacts.

We could correctly predict that the Fed will cut rates and watch stocks fall afterward.

We could correctly predict that economic data will be bad and watch the market rally.

It’s not just “What do I think will happen?” It’s also “What does the market think will happen?”

P.S. This isn’t a hard-and-fast rule—just one explanation for why markets sometimes behave the way they do. Markets are complicated and rarely follow any single rule totally consistently.

“Good-To-Know’s”

Basically, if analysts expect a company to report EPS of $1.90, $2.00, $2.05, and $2.15, the consensus estimate would be roughly $2.03 per share.

This is the number behind headlines like:

“Company XYZ beats earnings estimates.”

If XYZ reports $2.20 EPS against a $2.03 consensus, it beat the estimate. If it reports $1.85, it missed.

But beating the consensus doesn't guarantee the stock goes up.

The market's expectations can definitely extend beyond the published consensus.

It’s just good to know.

Quote(s) I Like

Trade Mechanics

Let’s compare two similarly priced cash-secured put opportunities: one in Alphabet (GOOGL) and one in Tesla (TSLA). Each strike represents roughly the 25-delta put expiring October 16, 2026.

The stocks trade at almost identical prices—but their different levels of implied volatility create noticeably different potential returns.

If we wanted to buy Alphabet at a discount, we could sell the October 16 $325 put for about $6.00 in premium. With shares trading near $346.96, that represents roughly a 1.88% return on risk over 52 days, with an effective cost basis of $319.00 if assigned.

For Tesla, we could sell the October 16 $320 put for approximately $8.75. With shares trading near $350.25, that represents a 2.81% return on risk over the same period, with an effective cost basis of $311.25 if assigned.

The most interesting part is that both stocks trade near $350, both puts carry approximately 25 delta, and both require roughly $31,000 in capital. Yet Tesla’s premium is more tempting.

Why? Tesla’s 30-day implied volatility is 39.8%, compared with only 27.4% for Alphabet. The market expects Tesla to experience larger price swings, so option sellers are paid more for the heightened uncertainty.

The higher premium obviously isn’t free money.

Tesla pays more because it’s expected to move more.

Same capital, but a bumpier ride (and a bigger premium).

This is for educational purposes only—not a trade recommendation. Remember to always do your own due diligence and consult a financial advisor before making investment decisions.

Throttle Q&A

Can 2 stocks at the same price have completely different premiums?

Yes (see the Trade Mechanic above).

Share price is only one input. Implied volatility, time to expiration, strike distance, interest rates, and upcoming events all affect premium.

Should we only sell puts when IV rank is high?

Not necessarily.

High IV improves premium, but it can also signal genuine risk. Fundamentals and willingness to own the stock still come first.

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Disclaimer

The information provided in this newsletter is sourced from reliable channels; however, we cannot guarantee its accuracy. The opinions expressed in this newsletter are solely those of the editorial team, contributors, or third-party sources and may change without prior notice. These views do not necessarily reflect those of the firm as a whole. The content may become outdated, and there is no obligation to update it.

This newsletter is for informational purposes only and does not constitute personal investment advice. It is not intended to address your specific financial situation and should not be construed as legal, financial, tax, or accounting advice, or as a recommendation to buy, sell, or hold any securities. No recommendation is made regarding the suitability of any investment for a particular individual or group. Past performance is not indicative of future results.

Options come with inherent risks. We strongly advise you to consult with a financial advisor before making any investment decisions, including determining whether any proposed investment aligns with your personal financial needs.