A big rally in SpaceX after earnings is giving hope to Meta and Tesla bulls ahead of their reports due Wednesday afternoon.
Options trading in both stocks leaned bullish after the open Wednesday, with Meta options looking particularly one-sided as traders bought more calls than puts and more put trades likely initiated by sellers than buyers. More than 30,000 calls traded at or above the ask, suggesting they were bought, versus under 17,000 puts, Cboe LiveVol data shows.
Meta options have generally been bullish since the stock's March low, when the put/call ratio of open contracts plunged to 0.5, meaning two calls open for every one put contract, and that hasn't budged much since, Barchart data show. Almost $22 million of trades were done with a bullish intent on Wednesday, compared to $7.5 million looking for downside.
Market-makers are pricing a 6.5% swing for Meta after earnings, a little under the 9% average the past four quarters. The most popular contract to buy on Wednesday was the 800 strike call expiring Friday that costs $1.40 and needs Meta to rally 14% into the weekend, SpotGamma data shows.
In Tesla, the flows also lean bullish, but with less conviction. The put/call ratio of open contracts is 0.75, compared to Meta's 0.5, though more calls did trade Wednesday morning than puts.