Investors are preparing for divergent reactions as Microsoft sits less than one percent from its record close and Alphabet lingers near a technical bear market. Options pricing indicates Alphabet could swing 5.8%, more than double its historical average, while Microsoft's implied move remains below 5%. Despite rising put activity across the Nasdaq 100 pullback, aggressive positioning emerged for Alphabet, highlighted by a single trader buying roughly $18.5 million in January 360-strike call contracts.
Key points
Alphabet's put-to-call ratio has climbed to 0.72, marking its highest defensive level sin…: Alphabet's put-to-call ratio has climbed to 0.72, marking its highest defensive level since August.
Microsoft options traders anticipate an earnings swing under 5%, which is milder than its…: Microsoft options traders anticipate an earnings swing under 5%, which is milder than its typical 6% historical move.
Tuesday's trading in Alphabet saw 312,000 call options change hands, led heavily by buyer…: Tuesday's trading in Alphabet saw 312,000 call options change hands, led heavily by buyer-initiated contracts despite broader market caution.
Sources checked by our analysis pipeline: 1
(Reader note: Options Action will have live coverage of how to trade Alphabet and Microsoft heading into their earnings after the bell with Options Action contributors Mike Khouw and Brent Kochuba, so check back later today at 2:30 p.m. ET)
The market's mini rally faces a key test after the bell when tech giants Alphabet and Microsoft report. The technical set-up and options expectations could not be more different.
Microsoft is less than one percent below its closing record reached earlier this month, while Alphabet is flirting with technical bear-market territory, off 20% from its closing high in May. Market-makers are pricing a 5.8% move for Alphabet stock after its report, compared to under a 5% swing for Microsoft, Cboe LiveVol data show.
For Microsoft, it's a smaller implied move than its 2-year average swing of 6%. For Alphabet, which has averaged a 2.7% reaction over that time period, it's more than double – which arguably makes sense considering the shares dropped 7% after last quarter's report and rallied 10% the report prior.
Investors engaged in profit-taking after the beverage maker posted a 191% surge in quarterly net profit, interrupting a two-day post-earnings rally. While expanding product volumes and premiumisation support the company's long-term trajectory, analysts caution that aggressive trade competition and persistent input-cost inflation will weigh on near-term operating margins.
Market participants are driving a positive shift in trading momentum for the casino operator during the current session. The sudden upward trajectory reflects an increase in buying interest across the exchange. Investors continue to monitor the equity as it sustains higher price levels throughout the trading day.
Markets reacted sharply after the South Korean technology giant failed to deliver an updated capital return framework alongside its recent financial results. Compounding market frustration, the company ramped up spending projections while its core semiconductor division delivered weaker-than-anticipated earnings. This unexpected confluence of negative updates quickly soured sentiment and triggered an intraday reversal in the equity.