It doesn’t take a lot of courage to predict fireworks in the markets following tomorrow’s Fed announcement, but it is interesting to wonder which stocks will be the biggest movers.
A scan of some of the stocks with the highest implied volatility tells a good part of the story. From the group below comes some obvious choices, such as home builders and lenders. There are also two Chinese companies, including one in the red-hot solar sector, as well as various natural resources plays in gold, oil/gas, and dry bulk shipping. Then, of course, there is the VIX itself.
[The chart above includes only front month at the money options with an IV of 70 or more and a relatively low bar for volume and open interest.]
For the record, the current VIX IV is right in the middle of the 52 week range and has been below 30 day historical volatility for the past month or so.
I have included a Yahoo finance link to all nine high IV stocks (actually eight stocks and the VIX, but who’s counting…) for those who like to play with fire. As I write this, I’ve begun to wonder whether traders are more likely to have been pyromaniacs as children. Hmmm. Are traders more or less prone to having risky hobbies? Lurkers, feel free to weigh in on this one.