Watch Live: Options traders break down a massive Alphabet trade into earnings — SkimNews
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- Alphabet was priced by Cboe LiveVol for a 5.8% post-earnings move, versus under 5% for Microsoft; that is more than double Alphabet’s 2.7% average reaction over two years, compared with Microsoft’s 6% average.
- Alphabet sits nearly 20% below its May peak and near technical bear-market territory, while Microsoft is less than 1% below its record; Alphabet fell 7% after last quarter’s report after rallying 10% after the prior report.
- A bullish trader bought 2,271 contracts of a $350/$365 call spread for about $4.40, targeting $365 and a 13% advance as a bet that the worst was behind Alphabet.
- A bearish trader sold 9,000 Nov. 20 $290-strike puts and bought 3,000 Jan. 15, 2027 $300-strike puts in a 3x1 put diagonal, aiming for the near-term puts to expire worthless and the longer-dated position to benefit from a 9% decline through mid-January.
- Cboe data showed 435,000 Alphabet options traded Tuesday, roughly 312,000 calls; nearly 102,000 call trades appeared buyer-initiated, versus 54,000 initiated by sellers.
- SpotGamma identified one trader buying about $18.5 million of Alphabet January $360 calls across eight transactions of 2,850 contracts each.
- Barchart put/call data showed Alphabet at 0.72, its highest since August, while Microsoft was at 0.59, up from 0.43 in June; both remain below 1 as the Nasdaq 100 pulled back.
Why it matters: Traders are positioned for both sides of Alphabet’s earnings: one bullish spread targets a 13% rally, while a put diagonal is structured around a 9% decline. With a 5.8% move priced—more than twice Alphabet’s 2.7% two-year reaction average—the setup leaves unusually wide, conflicting earnings exposure.
Ask SkimNews
