The core of our tastytrade philosophy rests on the mathematical relationships in the market being reliable and dependable over time. One of these relationships that we lean on quite heavily is theIn other words, when volatility is moving higher, stock prices are almost always moving lower.
But interestingly enough, as an earnings date approaches and volatility is on the rise, we don’t necessarily observe stock prices moving lower. In fact, they are very much independent of volatility during this window of time. So is this mathematical relationship violated?