Next Week in Weeklys – 4/4/2014

Next week is the start of earnings season for the first quarter of 2014.  Back in the day (like a few quarters ago) Alcoa (AA – 12.63) was still a member of the Dow Jones Industrial Average and was consistently the first DJIA stock to report earnings.  Much like the first robin of spring the Alcoa earnings report was the indication of the beginning of a new earnings season.  It turns out AA is also the first company with short dated or weekly options to report numbers next week so I think the AA report should still be considered the start of earnings season.

The two stocks that caught my interest on this list are actually the two that go last.  JP Morgan (JPM – 59.81) and Wells Fargo (WFC – 49.56) report Friday before the open and are the first big financials to release their earnings numbers.  Last quarter it was almost like they didn’t report earnings since both stocks hardly budged to the upside.  Sometimes when the previous quarter resulted in a non-reaction the options may be underpriced relative to the historical average.  I’ll be interested to see (and will probably comment in this space) on what JPM and WFC straddles are pricing in as we approach the market close on Thursday.