US 100 into earnings: three sessions, one question.

The note

The options market is pricing a smaller move for the Nasdaq 100 over the next three sessions than at any point this quarter. That is either confidence or complacency, and the honest answer is that nobody knows which until afterwards.

What we can say is that the distribution of outcomes is wider than the price implies. Three of the largest constituents report in the window, and the index's reaction to each has been asymmetric this year: modest on beats, sharp on misses.

For a CFD trader this changes the question. It is not "which way" but "how much". A position sized for the implied move is a position sized for the calm case. A position sized for the realised moves of the last four quarters is roughly half the size.

We would rather see a client take the smaller position and be there for the next one than take the larger position and not be.