Earnings Preview: First Solar, Visa, and Exxon Mobil

Analyzing recent option activity ahead of earnings from First Solar, Inc. (NASDAQ:FSLR), Visa Inc (NYSE:V), and Exxon Mobil Corporation (NYSE:XOM)

Apr 29, 2015 at 3:18 PM
facebook twitter linkedin

Among the stocks gearing up to report earnings tomorrow are solar panel maker First Solar, Inc. (NASDAQ:FSLR), as well as blue chips Visa Inc (NYSE:V) and Exxon Mobil Corporation (NYSE:XOM). Below, we'll take the pre-earnings temperature of FSLR, V, and XOM. 
  • The shares of FSLR have rebounded 59% since hitting an annual low of $39.18 on Jan. 20, last seen hovering at $62.30. However, puts have been popular in the options pits, as First Solar, Inc.'s 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.66 is higher than 73% of all similar readings from the past year. On the earnings front, the stock enjoyed a 7% post-earnings gain in late February, and has moved an average of 6.7% in the session immediately following its last four earnings reports. FSLR's near-term straddle, meanwhile, is pricing in a 6.4% swing. Traders are paying relatively fair prices for their near-term bets on the equity, as its 30-day at-the-money implied volatility of 44% stands in the 53rd percentile of its annual range. 
  • On the other hand, the shares of have taken a step back recently. Although the stock notched an all-time high of $69.98 last week -- due in part to a decision by the Chinese government to open their credit market to Visa Inc and competitor MasterCard Inc (NYSE:MA) -- it has since pulled back roughly 4% to $67.29. Heading into today's session, traders have shown a preference for calls over puts, as V's 50-day ISE/CBOE/PHLX call/put volume ratio of 1.63 stands in the 95th percentile of its annual range. Elsewhere, the security has moved an average of 5.4% in the session immediately following its last four earnings reports. After V steps into the earnings limelight tomorrow, the options market expects the equity to move 3.4% by Friday's close, per its near-term straddle. Short-term option players are paying up to place bets, as V's Schaeffer's Volatility Index (SVI) of 28% is the highest similar reading from the past 12 months. 
  • XOM has been in recovery mode, with the shares up 6% from their March 13 two-year low of $82.68 to linger near $87.65. However, the stock is now staring up at potential resistance from its 20-week moving average, which has ushered XOM lower since its late July peak. Sentiment in the options pits has been bullish, as Exxon Mobil Corporation's 10-day ISE/CBOE/PHLX call/put volume ratio of 1.14 is higher than 72% of all equivalent readings from the last year. On the earnings front, XOM has experienced an average post-earnings swing of 2.6% in the session immediately after its last four trips to the earnings confessional. According to the stock's near-term straddle, the options market is pricing in a move of 2.2% this go-around. Speculators are paying relatively attractive prices for their near-term bets on XOM, as its SVI of 20% reads in the 41st percentile of its annual range. 

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 



Special Offers from Schaeffer's Trading Partners