Option Traders Chasing Torrid Stock Rally Turn Focus to Earnings

Option traders have flipped from concern that the Iran war will sink the economy to fear of missing out on the torrid equity rebound. That shift away from macro risk to individual stocks is set to continue as corporate earnings take center stage.

Benchmark oil futures have fallen back with the ceasefire and ongoing US-Iran peace talks, even as ship traffic through the Strait of Hormuz remains at a standstill. Risk sentiment has significantly improved across asset classes over the past couple of weeks, sending implied volatility from equities to rates tumbling to near pre-war levels.