Amazon, Apple Leap Over Tesla in Top 3 Options Volume After Earnings

Luzi Ann Santos joined discussion · Nov 2, 2024 00:04

$Amazon (AMZN.US)$ and $Apple (AAPL.US)$ attracted heavier options trading volume than $Tesla (TSLA.US)$ as investors, traders and speculators expressed their sentiment toward these stocks after reporting quarterly earnings.

As of 12:04 p.m. in New York, more than 1.1 million Amazon options have already traded, more than double the 20-day average. That surpassed Tesla's options volume of 970,710 contracts, making Amazon the second most active stock options, behind $NVIDIA (NVDA.US)$'s 2.06 million.

Source: moomoo mobile app

(To see Tesla's options chain, click here. For the options ranking, click here. To see Amazon's options chain, click here.)

Amazon's stock options volume surged after the ecommerce giant that's also the market leader in cloud forecast late Wednesday a better-than-expected operating income for the quarter ending in December and reported earnings that surpassed analysts' estimates by 25%, according to data compiled by Bloomberg.

The third quarter results marked an eighth straight quarterly earnings beat for the company, data showed. Revenue for the three months ended Sept. 30 also exceeded analysts' estimates, buoyed by stronger than expected online store sales and advertising and robust growth at Amazon Web Services.

Amazon, Apple Leap Over Tesla in Top 3 Options Volume After Earnings

The company also said net sales for the fourth quarter could reach between $181.5 billion and $188.5 billion, including unfavorable impact of about 10 basis points from foreign exchange rates. While the midpoint of that range is below the $186.4 billion Bloomberg consensus, JPMorgan analysts see the outlook as "strong," as they raised their price target for the stock to $250, from $230, while boosting their EPS forecast for the stock by as much as 7%.

JPM analysts reiterated their overweight rating on the stock, citing "solid AWS growth with AI monetization ramping," oting significant margin expansion for the business.

A more than $13 jump in the share price pushed many of the call options in-the-money, just hours before expiration, helping boost volume. That likely include shareholders who sold covered call options and are now buying them back to prevent the option holders from exercising the contracts.

As expected, the rally rendered many put options out-of-the-money, prompting the holders to exit those positions before they expire worthless.

In the case of Apple, a $3.78 decline in the share price pushed many call options out-of-the-money, while rendering many put options in-the-money. That helped boost options volume to 895,780 contracts so far, putting Apple on pace to be the third most heavily traded stock options.

(To see Apple's options chain, click here. For the US options market page, click here.)

Shares of Apple slipped after Chief Financial Officer Luca Maestri forecast that revenue for its December fiscal quarter will rise low-to-mid-single digits from a year earlier during the company's earnings call late Wednesday. He also said services revenue is expected to "grow double digits at a rate similar to what we reported in the fiscal year 2024."

Market consensus on Apple could "reset lower," with expectations that "seem far too high looking out" to 2025-2026, Bloomberg quoted KeyBanc Capital Markets analyst Brandon Nispel as saying. He has an underweight rating on Apple, with a price target of $200, implying his outlook for downside potential from the current stock price of $222.56.

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