Earnings season is heating up as Alphabet, Amazon, Meta, and Microsoft—four members of the “Magnificent Seven”—prepare to report their quarterly results Wednesday night. Options traders are anticipating significant market volatility, with over $800 billion in market cap movement priced in post-announcement. Notably, current implied moves for three of the four companies exceed their four-quarter averages, suggesting heightened expectations from investors.
For traders, the implications are clear: while Meta shows a smaller implied move compared to its historical average, Alphabet’s options pricing indicates a potential disappointment based on its past performance. Conversely, bullish sentiment prevails across the board, particularly for Amazon, where substantial call buying signals confidence in upward price movement. Microsoft, despite being less favored, has also seen notable bullish options activity.
Market professionals should prepare for a potentially turbulent trading session following these earnings reports, as both implied volatility and directional bias suggest that investors are positioning for significant price shifts.
Source: cnbc.com