Obscure volatility measure points to a ‘Magnificent Seven’ earnings breakout
Traders work in the S&P options pit at Cboe Global Markets on Thursday, November 13, 2025 in Chicago, Illinois, United States.
Christopher Dilts | Bloomberg | Getty Images
If S&P 500 The “Magnificent Seven” may need to come into play again to set a new record, and that’s exactly what could happen this earnings season, according to a new survey of options positioning among the most actively traded stocks in the S&P 500.
By comparing the price of one-standard-deviation out-of-profit puts to the price of equivalent puts and comparing that figure to the range over the past year, the analysis creates a Venn diagram of stocks whose calls are not only in high demand, but are also in uniquely high demand by that stock’s own standard. For example, if calls are much more expensive than puts, but stock options typically trade that way, they won’t be able to make the cut.
Meta And Microsoft According to Nations Indexes’ “RiskDex” metric, which tracks skewness in bid/ask pricing, it tops the analysis, followed by Amazon, Tesla and Advanced Micro Devices.
MSFT and Meta year to date
Meta’s RiskDex score of 0.75, meaning one standard deviation out-of-the-money calls are 25% more expensive than equivalent puts, was the lowest score in the analysis and ranked in the 91st percentile of heavy call readings on the score last year. Microsoft’s ratio was 0.79 in the 93rd percentile.
“I think the fact that so many names have this much connotation skew is indicative of the opposite,” Scott Nations, president of Nations Indexes, said by phone. “The upward trend is so widespread that they’re priced for perfection. I think these people are setting themselves up for disappointment; look at how Nvidia put out big numbers and just kind of melted away.”
If the stock rewards its bullish position following earnings, that would mean a major rotation in market leadership. Meta and Microsoft haven’t posted in nearly a year, and Amazon has lagged the Nasdaq 100 to date.
Amazon’s RiskDex was just 0.98, meaning calls are marginally more expensive than puts, but it’s uniquely bullish by stock standards, scoring in the 92nd percentile of bullish.
Tesla’s And AMD Compared to their 52-week history, they were in the top 80 percent of the uptrend and had ratios around 0.9 each.
