News that 148 passengers and crew were feared died following the crash of a Germanwings flight in a remote area of Southern France sent shares in Lufthansa (Ticker: LHA) down by about 3%. Germanwings is the low-cost subsidiary of Lufthansa, and shares in other budget carriers fell in sympathy.
Shares in Easyjet (Ticker: EZJ) and Ryannair (Ticker: RYA) were lower by 0.4% while those in Finnair (Ticker: FIA1S) were lower by 0.3%. Air France shares traded 1% lower on the day. Implied volatility in the option market also tracked higher in response to the fatalities, with Lufthansa IV trading higher by 16.8% to 33.5%. Air France option traders also lifted its IV reading to 36.8%, while Easyjet was relatively sanguine at 23.4%. The Airbus A320 airliner was on course from Barcelona to Dusseldorf having taken off at 10am in Spain before sending a distress signal 47-minutes later. It crashed near Prads Haute Breone on the southern edge of the Alps.
Chart shows implied volatility edged higher after news broke of crash
About the Author
Andrew is a seasoned trader and commentator of global financial markets. He worked for several London-based banks trading cash and derivatives before moving to the U.S. to attend graduate school. Andrew re-joins Interactive Brokers following a two-year stretch at a major Wall Street broker-dealer as their Chief Economic Strategist. His coverage of stocks, options, futures, forex and bonds regularly surfaces in global media, and over the last several years Andrew has made many TV appearances on Bloomberg, BBC, CNBC and BNN and Yahoo Finance.