1, in the past week, it fell by more than 2%, and the volume of options on Friday decreased slightly to 4 million contracts, with a call ratio dropping to 56%; on the open options chain, the call with an expiration date of this Friday and a strike price of $110 was the hottest, with a trading volume and open interest of nearly 0.09 million contracts. $Tesla (TSLA.US)$

• Earnings release date: October 23rd after market close

• Performance forecast: Q3 revenue of $25.674 billion, a year-on-year increase of 9.95%; earnings per share of $0.5, a year-on-year decrease of 6.17%.

Tesla's current implied volatility is ±10.4%, indicating that the options market is betting on a single-day price change of up to 10.4% post-earnings. Compared to the previous four quarters where the post-earnings price change was approximately 11.5%, the current options value still appears slightly undervalued.

In the past 12 earnings days, tesla has a 42% probability of rising, with a maximum increase of 12.1% and a maximum decline of -12.3%; the stock price volatility has exceeded market expectations by about 70% in the past, therefore, the win rate of using a long call spread options strategy in earnings season is about 75%.

Based on the skew of options volatility, the current market sentiment towards Tesla is bullish. An examination of large orders with trading volume above $10 million last Friday revealed significant disagreements between long and short positions by major players.

Among these, there is a bullish buy order for opening 10 October 18th expiring calls with a strike price of $225; there are also two options buyers simultaneously purchasing October 25th expiring puts at $260 and January 17th next year expiring puts at $255, to hedge against further decline in Tesla.

3, the strong performance continued after the earnings report. The volume of options on Friday surged to 0.3 million contracts, and the call ratio increased again, to around 70%. On the options chain, the call with a $40 strike price expiring this Friday was sought after, with a trading volume of 0.034 million contracts and an open interest of 3,800 contracts. The option recorded a 100% increase on the day. $Bank of America (BAC.US)$

• Earnings release date: October 15th before the market opens

• Earnings forecast: Q3 revenue of $25.232 billion, a 0.26% year-on-year increase; earnings per share of $0.76, a 15.23% year-on-year decrease

Bank of America's current implied move is ±3.9%, indicating that the options market is betting on a single-day price swing of 3.9% post-earnings; in comparison, the stock price change in the previous four quarters post-earnings was about 3.1%, the market expects the stock price volatility to intensify this time.

In the past 12 earnings days, Bank of America has a very high probability of rising, reaching 83%, with a maximum increase of +6.1% and a maximum decrease of -3.5%.

From the skewness of the options volatility, the current market slightly favors bearish sentiment towards Bank of America. Analysis of active option trades from last Friday revealed that 63% of the trades were call options for Bank of America, call options were particularly active, and among options expiring this Friday, the highest trading volume was in the $42 strike call options, with a volume of nearly 0.02 million contracts traded and an open interest of nearly 0.06 million contracts.

$Netflix (NFLX.US)$

• Earnings release date: After market on October 17th.

• Earnings forecast: Q3 revenue of $9.765 billion, a year-on-year increase of 14.32%; EPS of $5.11, a year-on-year increase of 36.87%.

Netflix's current implied move is ±7.9%, indicating the options market is betting on a daily price swing of 7.9% post-earnings; in comparison, the stock price change after the previous four quarters was about 9.3%, suggesting a slight undervaluation in current options pricing.

In the past 12 earnings days, Netflix has a relatively low probability of rising after earnings, around 42%, with an average stock price fluctuation of ±11.4%; among them, the stock price changes after the previous four earnings were: +16.1%, +10.7%, -9.1%, -1.5%.

From the skewness of the options volatility, the current market slightly leans towards put on Netflix. Recently, Netflix's stock price has hit new highs,Implied volatilityThe level (IV) remains high, with the latest IV data at 43.45% on Friday, positioned at the 82nd percentile level within the year.

How to easily play with performance options? Futu options tool can help you!

Individual stock quote page > Unusual options activity > Filter > Customize filtering criteria to obtain the desired options activity information!

Individual stock page > Options > Options chain > Select an options > Option price calculator > Change the conditions to calculate the theoretical price of future options!

Disclaimer

This content does not constitute an offer, solicitation, recommendation, opinion, or guarantee of any securities, financial products or instruments. The loss risk of buying and selling options could be substantial. In certain circumstances, you may suffer losses exceeding the amount initially deposited as margin. Even if you set up backup instructions, such as stop loss or limit instructions, losses may not be avoided. Market conditions may render such orders impossible to execute. You may be required to deposit additional margin in a very short period of time. If the required amount cannot be provided within the specified time, your open contracts may be closed. However, you are still responsible for any shortfalls in your account arising from this. Therefore, before buying or selling, you should research and understand the options, and consider carefully whether such trading is suitable for you based on your financial situation and investment objectives. If you buy or sell options, you should be familiar with the exercise of options and the procedures at expiration, as well as your rights and obligations when exercising an option or at expiration.

Editor/new