How MKM's Strugger Is Playing Wayfair Ahead of Earnings

The video discusses the impact of social media stocks like Facebook and Twitter on the market, highlighting the concept of idiosyncratic risk. It then analyzes the S&P 500 earnings beat rate, questioning whether companies are managing better or analysts are underperforming. Finally, it presents a trading strategy for Wayfair stock, involving options to hedge against potential market movements.

What is the concept of dispersion in the context of stock markets?

• The uniform movement of all stocks in the same direction

• The scattering of stock performances, introducing idiosyncratic risk

• The simultaneous rise and fall of all market indices

• The consistent performance of stocks across different sectors

What is the significance of the S&P 500 earnings beat rate?

• It reflects the accuracy of analysts' predictions

• It shows the percentage of companies exceeding earnings expectations

• It indicates the overall market volatility

• It measures the growth rate of the S&P 500 index

What historical context is provided for the current S&P 500 beat rate?

• It is the highest since the early 1990s

• It has remained constant over the decades

• It is the lowest since the 1990s

• It fluctuates with no discernible pattern

What is the expected stock movement for Wayfair according to the option market?

• A 5% increase

• A 10% decrease

• No significant change

• A 14% move

What strategy is suggested for hedging against potential outcomes for Wayfair?

• Selling all shares

• Selling a call and buying a put spread

• Holding the stock without any action

• Buying more stocks