Options traders break down a massive Alphabet trade into earnings — SkimNews
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- Alphabet’s options priced a 5.8% post-report move—nearly 6%, versus an eight-quarter median of 2.6% and a 2.7% two-year average—while Microsoft’s implied move was under 5%.
- Alphabet shares were nearly 20% below their May high and flirting with technical bear-market territory, versus Microsoft less than 1% below its closing record; Alphabet fell 7% after last quarter’s report and rose 10% after the prior one.
- Alphabet’s bullish positioning included a trader buying 2,271 contracts of the 350/365 call spread for about $4.4, targeting $365, or a 13% jump from the then-current price.
- Alphabet’s bearish positioning came through a 3x1 put diagonal that sold 9,000 Nov. 20 290-strike puts at $4.15 each and bought 3,000 Jan. 15, 2027 300-strike puts at $2.15 each, targeting a 9% decline through mid-January.
- Alphabet’s put-to-call ratio stood at 0.72, its highest since August but still consistent with the past year’s sub-1 baseline; Microsoft’s ratio was lower at 0.59, up from 0.43 in June.
- Alphabet options flow was tilted toward buyers: among 435,000 options traded, Cboe counted almost 102,000 likely buyer-initiated call trades versus 54,000 seller-initiated ones, with the remaining activity near mid-price.
- Alphabet’s heaviest call buying included about $18.5 million of January 360-strike calls across eight transactions of 2,850 contracts each, which looked like purchases by a single trader.
Why it matters: The earnings setup is materially larger for Alphabet than Microsoft: options price a 5.8% Alphabet move against under 5% for Microsoft, while Alphabet sits nearly 20% below its May high. The split between a $365 call target and a 9% January downside bet leaves volatility traders positioned for both large gains and extended losses.
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