Meta and Tesla are set to report earnings on Wednesday after the bell, with both stocks experiencing bullish options trading activity that suggests investor optimism ahead of their announcements [1]. The positive sentiment follows a significant rally in SpaceX after its earnings report, which has bolstered confidence among bulls in both companies [1].
Meta's options market shows particularly strong bullish positioning, with traders buying more than 30,000 calls at or above the ask compared to under 17,000 puts, according to Cboe LiveVol data [1]. The put/call ratio of open contracts stands at 0.5, meaning two calls are open for every one put contract, a level that has remained relatively stable since March [1]. On Wednesday, almost $22 million of trades were executed with bullish intent compared to $7.5 million seeking downside exposure [1]. Market-makers are pricing a 6.5% swing for Meta after earnings, slightly below the 9% average move over the past four quarters [1]. The most popular contract among traders was the 800 strike call expiring Friday, costing $1.40 and requiring Meta to rally 14% into the weekend [1].
Tesla's options activity also leans bullish, though with less conviction than Meta [1]. Of 520,000 contracts traded in Tesla, 315,000 were calls, with traders buying 88,000 calls and 65,000 puts [1]. The put/call ratio of open contracts is 0.75, higher than Meta's 0.5, indicating relatively more put interest [1]. Call-buying premiums totaled over $200 million compared to $84 million in puts, demonstrating net bullish positioning [1]. Market-makers are pricing a 5.5% swing in Tesla after its report, above the four-quarter median of 3.5%, though Tesla's last report caused a 14% selloff that inflates the average move in that period [1]. The most heavily traded contracts by volume were the 385 and 400-strike calls expiring Friday [1].
CONCLUSION
Both Meta and Tesla are attracting significant bullish options positioning ahead of Wednesday earnings reports, with Meta showing particularly strong call-buying activity and conviction. The elevated options premiums and trading volumes suggest traders are positioning for substantial post-earnings moves, with market-makers pricing 6.5% and 5.5% swings respectively, above recent historical averages.