After beginning the first day of the month with triple-digit gains, stocks pulled back slightly for marginal wins on Thursday. Yesterday's volatility comes as the outlook for further fiscal stimulus in the U.S. muddied, after House Majority Leader Steny Hoyer's office relayed that the House was expected to vote on the new stimulus bill. While the $2.2 trillion Democratic bill was primed to be passed on Wednesday night, lawmakers delayed a vote to allow House Speaker Nancy Pelosi and Treasure Secretary Steven Mnunchin more time to talk about a bipartisan plan.

The Dow Jones Industrial Average (DJI - 27,816.90) rose 35.2 points on the day yesterday. The S&P 500 Index (SPX - 3,380.80) added 17.8 points for the day, and the Nasdaq Composite (IXIC - 11,326.51) gained 159 points on Thursday. Lastly, the Cboe Volatility Index (VIX - 26.70) tacked on 0.3 point during yesterday's trading session.

As we wrap up the week today, Wall Street will be all eyes on the unemployment rate weekly update, as well as nonfarm payrolls data.  It's important to note that today's jobs report will be the last report on the American labor market before the presidential election, as economists are predicting an unemployment rate higher than it has ever been going into an election.

There are no notable earnings reports scheduled for today. So, it's time to catch up on the hot stocks presenting major options play opportunities right now before the opening bell:

• This packaging stock could be headed toward more record-breaking highs
• After the company's quarterly report was released yesterday, this beverage stock fell flat
• This coffee stock announced a 10% dividend hike yesterday and the stock is inching up
• After major restructuring news and layoffs were announced, this insurance stock dropped
• This oil stock moved lower on staff reduction announcement and a bear note
• Everything you need to know before you buy this retail stock

With the tumultuous month of September finally behind us, the first full week of October won't offer much of a breather as coronavirus and election concerns are expected to continue to escalate. The economic calendar features a Fed update, and investors will also be keeping an eye on crude oil inventories and energy data.

As far the earnings docket goes, just a small handful of big names stepping into the limelight next week, including Delta Air Lines (DAL) Domino's Pizza (DPZ) and Levi Strauss (LEVI). Next week will kick off with the non-manufacturing Purchasing Managers' Index (PMI) due out on Monday and no notable earnings reports on deck, yet.

Want to learn more about volatility and the VIX? We have you covered. We broke down different concepts of volatility this week, and we teamed up with Cboe Global Markets for a VIX round table, where we discuss different ways to use volatility in 2020 in our weekly podcast, Schaeffer's Market Mashup. 

All earnings and economic dates listed are tentative and subject to change. Please check with each company's respective website for official reporting dates.

As new traders flood the market, a return to the basics may help novices understand the fundamentals of options trading. To better assist them, we will be running posts diving into the finer details of options education. This week, we are looking at volatility, which refers to the propensity of a security's price to move higher or lower.

Implied volatility (IV) heavily influences the price of an option, because it measures the market's expectations for the underlying equity's performance during the life span of the option. The widely accepted rule is that higher IV means bearish price action, while lower IV is associated with bullish price action. For traders, this means that in the case of a high IV, options buyers might want to steer clear, as this means a more expensive cost of entry, whereas option sellers may want to capitalize as a way of maximizing the premium collected. It's worth noting that IV tends to move higher in anticipation of major events. 

Often after these major events such as a quarterly earnings report, implied volatility drops suddenly in a "volatility crush." In this scenario, the "uncertainty premium" drops out of the option price after the event. The threat of a volatility crush means option buyers should pay attention to implied volatility levels prior to entering a trade. When the disconnect between implied volatility and the actual realized movement is wide enough, option buyers can end up losing money on a trade, even if the shares are moving in the right direction. A volatility crush can also occur if there's a significant plunge in the CBOE Market Volatility Index (VIX). 

Historical Volatility (HV) is a backward-looking metric, as opposed to IV's forward-looking. The most common way to calculate HV, which measures how much the stock has moved over a set time frame, is to take the standard deviation of the difference between the stock's daily closing changes compared to the mean value of the stock during that same time period. In trading, HV is often used to compare to IV in order to gauge how much volatility can be expected going forward. 

For a deeper dive into volatility, the VIX, and the implications they have on the market, check out our Schaeffer's Market Mashup podcast. The episode below is a VIX round table with Cboe Global Markets, discussing the various uses of volatility in 2020.

The shares of PepsiCo, Inc (NASDAQ:PEP) are down 0.4% at $138.01, after the food and beverage behemoth entered the earnings confessional this morning, reporting third-quarter earnings that beat Wall Street's estimates. Additionally, revenue came in just above forecasts, boosted in part thanks to a rise in snack purchases by consumers still in lockdown.  

On the charts, PEP is still enjoying gains from its Sept. 28 bull gap, which sent the stock back above the $134 level -- a level that falls in-line with the stock’s year-to-date breakeven mark Meanwhile, PEP boasts a 12.8% lead over the last six months, while the stock’s 80-day moving average has once more solidified itself as a layer of support. That trendline is also in a prime position to capture any pullbacks the equity may see after this post-earnings blunder.

Today's options pits are flashing some serious bullish activity. In fact, in just the first hour of trading, over 10,000 calls have exchanged hands -- seven times the intraday average and volume pacing in the top percentile of the stock's annual range. Most popular is the weekly Ocotober 142-strike call, followed by the October 140 call. 

And with earnings in the rearview mirror, options seems like a decent way to go at the moment. PEP’s Schaeffer's Volatility Index (SVI) of 24% stands in the 13th percentile of its annual range, implying that options players are pricing in relatively low volatility expectations at the moment. What's more, the equity's Schaeffer's Volatility Scorecard (SVS) ranks at 16 out of a possible 100, implying that the stock has tended to disappoint on volatility expectations in the past year.

The shares of Starbucks Corporation (NASDAQ:SBUX) are up 0.9% at $86.70 this morning, after the board of directors approved a 10% hike in its quarterly cash dividend to 45 cents from 41 cents. This dividend payment will be distributed on Nov. 27 of this year, to shareholders of record on Nov. 12, and lifts Starbuck's annual dividend rate to $1.80 per share. 

SBUX has been trying to claw its way back toward its mid-September, six-month peak just below the $90 mark, following a steep drop later in the month. The equity has made a solid effort, and just reclaimed its 20-day moving average, where it is once again testing support. The stock has also been simmering just below its year-to-date breakeven, though it sports a six-month lead of 37%. 

Analysts are split on SBUX, with 10 calling it a "buy" or better, and 12 saying "hold." Plus, the 12-month consensus price target of $84.48 is a 2.6% discount to last night's close. 

The options pits are slightly more bullish. This is per SBUX's 50-day call/put volume ratio of 2.86 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 76% of all readings from the past 12 months. This suggests long calls are more popular than usual. 

Today kicks off the fourth quarter of 2020 and a brand new month of trading. While the major indexes all logged sharp monthly losses for the month of September -- their first losing trifecta since March -- the last day of September saw a rise in stocks.  The gains, though, were ultimately capped after House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin failed to deliver on an economic stimulus deal.

The Dow Jones Industrial Average (DJI - 27,781.70) 1.2% yesterday, and shed 2.3% for the month of September. For the full third quarter, the Dow added 7.6%. The S&P 500 Index (SPX - 3,363.00) 0.8% for the day yesterday. The Nasdaq Composite (IXIC - 11,167.51) gained 0.7% during yesterday's session. The indexes lost 3.9% and 5.1%, respectively, in September, but gained 8.5% and 11.1% for the full third quarter. Lastly, the Cboe Volatility Index (VIX - 26.37) tacked on 0.4% for the day yesterday, and fell 0.2% for the month. The VIX lost 13.3% for the third quarter of 2020.

Quick links to our proprietary analysis of hot stocks you should keep on your radar today:

• FEATURE: What traders should expect in Q4
• Controversy surrounds this auto manufacturer stock and delays deal with Nikola
• This specialty chemicals stock is flat despite slew of bull notes
• Why options bulls' next pick should be this online retail stock
• Will this fitness stock continue working out for investors?
• This utilities stock surged on takeover talks
• After announcing major layoffs due to coronavirus, this entertainment stock dipped
• This retail stock flew higher on analyst upgrade yesterday

As we kick off the month of October and the final quarter of 2020, there are quite a few the major news drops slated for today. Manufacturing data from the the Institute for Supply Management (ISM) will be released, in addition to core personal consumption expenditure data. We are also awaiting some major earnings announcements. We have rounded up all the companies slated to release their quarterly earnings today.

• Bed Bath & Beyond Inc. (NASDAQ: BBBY -- $14.98) operates a chain of retail stores, selling a large range of domestic merchandise directly to consumers.

  - Bed Bath & Beyond will report its fiscal first-quarter earnings of 2021 before the bell today.
  

• Conagra Brands, Inc. (NYSE: CAG -- $35.71) is a consumer-packaged goods food company in North America. Click here for our three-pronged Expectational Analysis® analysis of the market's reaction to the company's last earnings announcement.

  - Conagra will report its fourth-quarter earnings before the bell today. 

• PepsiCo, Inc. (NASDAQ: PEP -- $138.60) is a food and beverage company worldwide. PEP is currently 5.3% higher year-over-year. Click here to see how PepsiCo fared after its last earnings release, along with our deep-dive into the options pits' reaction

  - PepsiCo will report its third-quarter earnings before the bell today.
  

• SMART Global Holdings, Inc. (NASDAQ: SGH -- $27.34) designs and manufactures electronic products focused in memory and computing technology areas.

  - SMART will report its third-quarter earnings after the market closes today.
  

As we covered last week, tomorrow, Friday, October 2 will turn all eyes toward the unemployment rate update, as well as nonfarm payrolls data. There are no notable earnings reports as of this morning, but we will keep you covered on all earnings that are confirmed tomorrow morning.

Stocks fell yesterday marking their first loss in four days, as New York City experienced another coronavirus case outbreak; however, losses were capped as reports were released showing that consumer confidence rose more than analysts anticipated for the month of September.

The Dow Jones Industrial Average (DJI - 27,452.66) fell 0.5% on Tuesday. Nike (NYSE: NKE) led the list of winners yesterday with a 1.6% increase and Chevron (NYSE: CVX) paced the small list of losers today with a 2.8% decrease. Meanwhile, the S&P 500 Index (SPX - 3,335.47) lost 0.5% for the day yesterday. The Nasdaq Composite (IXIC - 11,085.25) shed 0.3% during yesterday's session. Lastly, the Cboe Volatility Index (VIX - 26.27) ended up 0.3% for the day yesterday.

As we noted last week, investors' attention be on the Automatic Data Processing (ADP) national employment report, as well as the latest GDP reading today. On top of that, the PMI also comes out later today, accompanied by pending home sales and crude oil inventories data. Today is the last trading session of September and of the third quarter of 2020.

ICYMI yesterday:

• This retail stock was boosted on positive outlook yesterday
• Options traders blasted this information services stock after earnings bet
• This semiconductor stock picked up steam ahead of earnings report yesterday
• Analyzing the opportunity for investors ahead of this gaming stock's latest product release
• This tech stock middled after widespread outage
• CEO retirement news slams this food stock, despite Q4 earnings beat
• This retail stock surged on Cowen upgrade and price-target hike
• Did you know we have a podcast?! Catch up on the latest episode right here.

As we round out third quarter of the year, earnings reports are pretty light. However, for your convenience, we have rounded up all the companies slated to release their quarterly earnings today.

• Enerpac Tool Group Corp (NYSE: EPAC -- $19.98) designs, manufactures, and distributes a range of industrial products and systems worldwide.

  - Enerpac Tool Group will report its fiscal third-quarter earnings before the bell today.
  

Outside of earnings announcements, which will be picking up now that we are wrapping up Q3, there are two highly anticipated IPOs slated for today: Palantir Technologies Inc. (NYSE: PLTR) and Asana Inc. (NYSE: ASAN). Both companies will be listed on The New York Stock Exchange (NYSE) with reference pricing set at $7.25 for Palantir, a data-mining software company, and a reference price of $21 for Asana, a team collaboration software company. Both companies are going public via a direct listing on Wednesday. As a side note, a reference price is not the same thing as the opening price, as it is simply a guide for investors prior to the opening bell. 

Tomorrow, the first day of October, manufacturing data from the the Institute for Supply Management (ISM) will be released, in addition to core personal consumption expenditure data. Earnings from Bed, Bath & Beyond (NASDAQ: BBBY), Conagra (NYSE: CAG), Constellation Brands (NYSE: STZ) and PepsiCo (NASDAQ: PEP) are slated to be released.

Online small business retailer Etsy Inc (NASDAQ:ETSY) has surged an impressive 165% in 2020, and was one of the few stocks that maneuvered the aftermath of the mid-March broader market selloff with ease. Now, the equity is in a wedge-like pattern on the charts, while also benefiting from solid support at the 80-day moving average and +100% year-over-year level. With this impressive foundation in place, now is the perfect time to buy calls.

In the options pits, peak put trading is evident at the 120-strike, with a handful of overhead calls set to expire over the next few weeks. An unwinding of this pessimism in the options pits could act as a tailwind going forward. What’s more, short sellers look to be in covering mode, and the 6.49 million shares sold short now account for 5.5% of the stock’s total available float.

The good news for options traders is that the stock’s Schaeffer’s Volatility Index (SVI) of 61% sits higher than just 25% of all other annual readings, meaning options traders are pricing in relatively low volatility expectations at the moment. Plus, ETSY’s Schaeffer's Volatility Scorecard (SVS) ranks at an 90 out of 100. This means the equity has tended to exceed these expectations during the past year.

Subscribers to Schaeffer's Weekend Trader options recommendation service received this ETSY commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.