Meta Stock Analysis: Options Market Predicting Smaller Post-Earnings Move
Investors in Meta’s stock are eagerly awaiting the company’s Q2 results, but the options market is signaling a more subdued post-earnings move this time around.
According to data from Option Research & Technology Services (ORATS), straddles for Meta’s stock are priced for a $39.24 move in either direction on Thursday following the earnings release. This represents an 8.3% move at current stock prices, significantly lower than the average move of $60.95 seen after the past 12 earnings reports.
Straddles are pure volatility plays, acting as an over-under bet on stock movement. While options oddsmakers typically have the edge, recent quarters have seen straddle buyers outperform expectations.
For instance, after Q1 results, straddles were priced for a $41.64 move but the stock actually dropped by 10.6%. Similarly, after Q4 results, straddles predicted a $25.37 move but the stock surged by 20.3%.
In conclusion, while the options market is forecasting a smaller post-earnings move for Meta’s stock this time, recent quarters have shown that surprises are still possible. Investors should remain cautious and prepared for any outcome when trading Meta’s stock based on options market predictions.