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Alternative headline: "Netflix stock plunges to only +24% in 90 days"
by volgo 8y ago
Alternative headline:
"Netflix stock plunges to only +24% in 90 days"
- hn_throwaway_99 8y agoSeriously, the stock plunged to where it was all of about 8 weeks ago.
- scurvy 8y agoSucks if you bought in this morning hoping for a big earnings surprise. (I didn't, but I know those that did)
- robomc 8y ago"Sucks if you bet on black" - buying shares hoping for an earnings surprise to pocket some free gains is the middle class version of having a good feeling about a horse.
- scurvy 8y agoWell, they're not free gains. It's also not any different than buying on any other day from an investing standpoint. Risk is still the amount of margin requirement (excluding derivative hedges).
- throwawaymath 8y agoOpening a position on the day of the earnings announcement is generally a bad idea regardless of whether you’re right or wrong about the direction. Volatility is effectively priced in at that point.
- hueving 8y agoYou're thinking of options, not stock. Stock price itself can't imply volatility, it can only reflect market expectations of earnings.
- deleted 8y ago[deleted]
- throwawaymath 8y agoWhile implied volatility is a feature of derivatives (and by extension, options), the price of an equity does undergo volatility, particularly from the heightened trading activity in anticipation of e.g. earnings. Volatility is not restricted to the definition of implied volatility.
- scurvy 8y agoYou're confusing stock with options.
- throwawaymath 8y agoNo, I'm not. I'm not talking about implied volatility. I'm talking about the way in which the stock price significantly changes in anticipation of the earnings announcement. Volatility is a formal variable for derivatives, but that doesn't mean equities (and the broader market) do not also experience volatility.
- hueving 8y agoSeriously, the more interesting news was the irrational exuberance leading up to today.