Meta, Tesla options trading leans bullish ahead of earnings

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Meta, Tesla options pre-earnings

Highlights

Meta options activity skews bullish with over 30,000 calls traded above the ask, a put/call open interest ratio of 0.5, and nearly $22 million in bullish trades Wednesday.
Market-makers expect a 6.5% post-earnings move for Meta, below its 9% four-quarter average; Wednesday's most popular contract is the 800-strike call expiring Friday, requiring a 14% gain.
Tesla options show upward bias with a put/call open interest ratio of 0.75 and over $200 million spent on calls versus $84 million on puts, as market-makers price a 5.5% earnings move.

Options positioning before earnings

As reported by CNBC, options trading in both stocks leans bullish on Wednesday morning, with Meta showing the clearest positive tilt. Cboe LiveVol data shows more than 30,000 Meta calls trade at or above the ask, indicating likely buying, versus fewer than 17,000 puts.

Meta options have generally stayed bullish since the stock's March low. Barchart data shows the put/call ratio of open interest falls to 0.5, meaning there are two open call contracts for every put, and that balance changes little since then. Nearly $22 million of Wednesday trades carry bullish intent, compared with $7.5 million aimed at downside.

Market-makers price in a 6.5% move for Meta after earnings, slightly below the 9% average of the past four quarters. SpotGamma data shows the most popular Meta contract on Wednesday is the 800-strike call expiring Friday, priced at $1.40 and requiring the stock to rise 14% by the weekend.

Earnings volatility expectations for big tech

Tesla's options flow also points upward, but with less conviction than Meta's. Its put/call ratio of open contracts stands at 0.75, and of the 520,000 Tesla contracts traded on Wednesday morning, 315,000 are calls, with traders buying 88,000 calls and 65,000 puts, according to Cboe LiveVol data.

At the same time, Tesla also sees notable call selling. About 83,000 call contracts are likely sold, and seven of the 10 largest trades by dollar value are call sales. Even so, SpotGamma's analysis shows traders spend more than $200 million in premiums on call buying, compared with $84 million on puts.

Market-makers are pricing a 5.5% swing in Tesla after its earnings report, above the four-quarter median of 3.5%. Tesla's last report triggers a 14% stock selloff, lifting the average move over that period to 5.5%, while the most heavily traded Wednesday contracts are the 385-strike and 400-strike calls expiring Friday.

Our earlier coverage examined how the S&P 500’s push toward 8,000 is increasingly dependent on “very, very strong” third-quarter earnings, as higher oil prices, elevated Treasury yields, and political uncertainty raise the bar for equities. The piece also underscored growing concentration risk in AI-linked megacaps and weakening market breadth, leaving the index more vulnerable to disappointment from a small group of leaders.

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