Smashing Volatility

Smashing Volatility

Share this post

Smashing Volatility
Smashing Volatility
AVGO Earnings a Vol Event?

AVGO Earnings a Vol Event?

Vol event trades for AVGO/NFP/CPI

Scott Murray's avatar
Scott Murray
Jun 04, 2025
∙ Paid
5

Share this post

Smashing Volatility
Smashing Volatility
AVGO Earnings a Vol Event?
Share

Now, we know how comical markets get from May-July. Seasonal QE, because it never fails (well almost never, more on this in a minute), but everyone and all the code/AI knows that QQQ and giga tech stocks (and software/cyber stocks) tend to rip during this period, blowing away the average stock.

Just looking at the Mag7, we are precisely repeating last spring-summer’s pattern of these stocks trouncing everything else. Relative performance versus equal-weight SPX, equal weight QQQ, IWM and SPY- the Acela was running at 150mph until it ran off the rails on July 11th when that resulted a factor crash:

You probably remember, IWM spiked 13% in five days as the long QQQ/short IWM got spectacularly unwound. Then a slew of knuckleheads verbally farted all over the financial airwaves about how healthy the broadening out was, that it was finally happening. But as Paul Harvey always said, ‘now you know the rest of the story’. IWM is still lower than last July, and mired in a perpetual slump as ‘investors’ herd into stocks getting more and more expensive by the day.

But shouldn’t it really be the Mag 8?

Yes it should. AVGO, enjoying yet another parabola party, up 45% since they last reported earnings to a ho hum response and 100% from the April lows? What has changed, well it’s summer:

And it has really made hay in June the last two years:

And part of the pre-earnings titillation in the stock going into Thursday can be seen by looking at last June’s earnings. It ran up into that, but then it kept going for days:

Aided by quarterly opex, it took the velocicoaster chart pattern, until the call option liquid nitrogen ran dry:

This post is for paid subscribers

Already a paid subscriber? Sign in
© 2025 Scott Murray
Privacy ∙ Terms ∙ Collection notice
Start writingGet the app
Substack is the home for great culture

Share