Tech Giant Earnings Today
Options Analysis and more on Bitcoin
We have Microsoft and Alphabet reporting after the close today with Amazon and Meta later this week as well. Microsoft is down about 10% from its July high of $366 currently trading $330. It has rallied off its $309 low in mid September and is sitting right on its 21 period Vwap. When we look at the options for expiration this Friday we have about 50k in open interest in the calls from 335 to 350. The puts are much lighter in open interest with about 27k from 330 to 320, which isn’t surprising considering the run from mid September to now as we have rallied pretty good off those lows. When we look at the At the Money call and put at the $330 strike the straddle costs around $14 so about a 4.2% implied move to break even there. It looks as if the market makers would love to set a close in between $330 and $335 this week based upon the Open Interest on these strike levels. When we look at the chart its interesting to note that the $330 area was the breakdown level from early 2022:
Moving over to Alphabet which is trading right at $140 up off the most recent $128 low. When we look at this Friday’s Call options expiration there is huge open interest at $150 strike of 21.2k with 5k on the $145 strike. All in all we have about 43k of open interest from $140 to $150. When we look at the Puts there really isn’t much to note and we have about 19k open interest from $140 to $130. It looks as if the market makers would want to settle this week somewhere between $135 and $140 and certainly avoid anything greater than $150!
When we look at the at the money straddle, it costs around $7.20 so an implied 5.1% move. As far as the chart, GOOG is above the 21 p Vwap unlike MSFT so they have had pretty solid strength, exhibited all year long. It will be interesting to see if this earnings is used to sell into any jump in price, our guess it will be sold into as the technical equity picture overall seems heavy:
Earlier today we had S&P Flash services and manufacturing PMIs all coming in higher than expected and the bond market was not too happy with this outcome as yields jumped and the US Treasury Curve flattened with the long end outperforming the shorter dated notes. Here is the current look at the US Treasury yields:
The US Govt is auctioning off $403 Billion this week of bills and notes with the $51B 2Y Note today, 5Y and 7Y Note in the following days and a Floating Rate 2Y Note to boot. The sheer size of this debt is becoming quite alarming and will only get worse as the laws of mathematics and interest start to gain steam with each passing day!
Finally and we know many do not agree, but we love Cathie Wood and ARK Invest, we have been critical of her moves in the past, but we see what she sees, we see that technology and its potential is always in our future and we love their recent chart on the fiat price of Bitcoin! We had to share this:
We agree with this trajectory and it is becoming more and more obvious by the day that the input to this price trajectory will not only come from increased demand vs a very limited supply, but rather the absolute monetary deterioration in global fiat fractional reserve currency. We have always viewed Bitcoin as a technology and we know the US government will do all it can to protect their fiat but it will not work. We suspect they will continue to accumulate Bitcoin via confiscation, via new laws and most likely through exchange based fiduciary breakdowns. We have always viewed cold storage and Hodling as the only real way forward with Bitcoin and we believe it is still very much in its infancy of adoption and the ecosystem will continue to pave the way for wider use cases. Bitcoin coupled with Gold from our purview will be the future of our global monetary systems. Till next time…please like, share and subscribe if you can.