arrow-left arrow-right brightness-2 chevron-left chevron-right circle-half-full facebook-box facebook loader magnify menu-down rss-box star twitter-box twitter white-balance-sunny window-close
SNAP Inc (SNAP) - after earnings put activity.
2 min read

SNAP Inc (SNAP) - after earnings put activity.

SNAP Inc (SNAP) - after earnings put activity.

  • Stock is 32% higher today on an earnings beat
  • Large options volume in near term puts, we compare to put spreads.

The Set-Up

SNAP was $19 in January, below $10 in March, and now ~$16.50.

Updated 1 month expected move from OptionsAI technology:

Unusual Options Activity

Most of the big volume lines are near term, with a lot of puts changing hands. Here are the 4 most traded option lines (of all stocks today) from Barchart:

Clearly some people looking for some cheap options for a failure (and in the case of the 19 call, a breakout above 2020 highs) There is also some large volume on the 15 puts expiring 5/15, about 10,000, currently trading about $0.75. Let's focus on that from a breakeven standpoint.

Buying that put requires SNAP to get below 14.25 by May 15th just to break even. Using 14.25 as a target on OptionsAI technology we see that is inline with the bearish consensus. The options market assigns a 22% likelihood of that move happening by 5/15:

Compare that to the trades generated by OptionsAI technology for a $14.25 price target. The first trade is a 16.50/14.50 put spread that costs about the same as the 15 put... yet breaks even much higher in the stock:

This trade makes $126 at the user price target of $14.25. That's where the out-of-the-money put breaks-even. Here's how it looks on the chart:

This is an example of the power of put spreads over puts and knowing the probability of a target price in the context of bearish expectations.

Of course if SNAP gave up its entire earnings gain in the next few weeks the put spread's profits would be capped and the OTM would start to kick in. But the options market is not implying a very good chance of that happening,

Give OptionsAI technology a try with your own price target in AAPL HERE

Actionable Insights from the Options Market

Earnings event expected moves
Unusual activity alerts
Spread trade education

Broker Dealer (FINRA Registered)

Built for one-tap spread trading
No chains. No per contract fees.
Powered by OptionsAI technology (Patent Pending)