We pointed out on X recently that the “most viral blog post of all time” may have marked a major low in software stocks. We of course are not CMTs, but this area has proven to be support for the iShares Expanded Tech-Software Sector ETF (IGV) over the last year, too, observes Brent Kochuba, founder of SpotGamma.
It would just be an amazing thing for everyone to freak out about something at the absolute low. That hasn't happened before...has it?
iShares Expanded Tech-Software Sector ETF (IGV)
If you look at software vols, we obviously still see some very high IV Ranks. But those should come down now that some earnings have passed. We’d argue that lower IVs in this space generate a bullish tailwind, and we also see some movement from left (put-heavy) to right, towards calls. IGV doesn't have the most consistent vol surface, but you can see the three-day history via the Compass line.
On this topic, we made a point of calling out the Salesforce Inc. (CRM) ultra-high IV play into earnings, and it may be worth playing similar short volatility trades in other similar names.
