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Interactive Options Course
Posted October 29, 2025 at 3:30 pm
This afternoon contains perhaps the largest confluence of potentially market moving events that an investor could imagine. A meeting always has the potential to send the broad market up or down (sometimes in the same afternoon), while earnings from any single megacap tech stock can have an outsized influence on the capitalization-weighted indices that are dominated by that group of stocks. With three of them arriving at once, we could see some dramatic post-close swings in the individual stocks and key index futures. The key question will be whether they offset or amplify each other’s moves.
Below is a brief visual reminder about the volatility that can ensue during Chair Powell’s press conference. The chart is from the last FOMC day on September 17th. We understandably traded in a narrow range prior to the 2:00 rate decision, but then we had an intraday swing of over 1% before finishing essentially unchanged on the day.
Source: Interactive Brokers
Checking in on the individual stocks in question, none of the three that are due to report this afternoon have options pricing that reflects excessive nervousness. It seems more like a bit of modest, prudent caution, at least when we look at the data in the IBKR Probability Lab for options that expire on Friday afternoon.
Source: Interactive Brokers
Source: Interactive Brokers
Source: Interactive Brokers
All three of the above charts for MSFT, GOOGL, and META respectively show peak probabilities slightly below the current market prices. The implied daily volatilities of 4.3%, 6.02%, and 5.95%, respectively, are roughly commensurate with these stocks’ longer-term average post-earnings reactions, though we do see some difference from recent activity. MSFT rose +3.95% after its last report, GOOGL, which is notably sparse with guidance, rose only 1.02% and 1.68% after its last two reports, while META zoomed 11.25% after its last earnings. In short, MSFT is reflecting a rough status quo, GOOGL is pricing in the potential for a bit more volatility, while traders do not expect a repeat of META’s recent moonshot.
In contrast, SPX traders remain sanguine about the confluence of today’s events, PLUS tomorrow’s reports from AAPL and AMZN, PLUS the anticipated summit between President Trump and Premier Xi. The implied daily volatility of 1.15% for options expiring Friday might be considered a shade high compared to recent index moves, but not outrageously so. And as is now typical, the bias is to the upside:
Source: Interactive Brokers
The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IBKR to buy, sell or hold such investments. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Interactive Brokers, its affiliates, or its employees.
Options involve risk and are not suitable for all investors. For information on the uses and risks of options, you can obtain a copy of the Options Clearing Corporation risk disclosure document titled Characteristics and Risks of Standardized Options by going to the following link ibkr.com/occ. Multiple leg strategies, including spreads, will incur multiple transaction costs.
The projections or other information generated by the Probability Lab tool regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Please note that results may vary with use of the tool over time.
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