What Options Players Expect for PINS Post-Earnings

The stock is up 192.6% in the last 12 months

Deputy Editor
Jul 29, 2021 at 1:42 PM
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The shares of Pinterest Inc (NYSE:PINS) are off 4.5% at $73.23 today, ahead of the social media name's second-quarter earnings report, which is due out after the close this evening. The stock has been in a gradual decline since running up against a familiar ceiling at the $78 level, closing a bull gap that helped launch the stock higher earlier this month. The 40-day moving average could serve as potential support for PINS, though, and year-to-date it's still up 10.7%, with an impressive 192.6% year-over-year return to boot. 

pins july 29

PINS has seen a number of outsized post-earnings moves over the past two years, including a 14.5% drop after its last report, as well as a 36.1% surge this time last year. During this time period, the stock averaged a next day move of 17.9%, regardless of direction, which is slightly lower than the 15.% swing options players are pricing in this time around. 

Speaking of, the options pits are bursting with activity ahead of the event. So far, 55,000 calls and 48,000 puts have exchanged hands -- triple the intraday average. The two most popular positions by far are the weekly 7/30 82- and 83-strike calls, with positions being opened at both. This suggests these traders are expecting a notable rebound for the underlying stock after the firm's earnings report this evening. 

Short-term options players, meanwhile, have rarely been more bearish. This is per PINS' Schaeffer's put/call open interest ratio (SOIR) of 1.09, which stands higher than all but 1% of readings from the past year, suggesting these traders have been exceptionally put-biased of late. 

The equity's 10-day put/call volume ratio reflects this. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), this ratio stands higher than 95% of all other readings from the past 12 months. This implies a healthier-than-usual appetite for long puts recently. 

The brokerage bunch has taken a mostly bullish stance, on the other hand. Of the 18 in coverage, 12 call PINS a "buy" or better, compared to six "hold" ratings. Plus, the 12-month consensus price target of $84.20 is a 14.6% premium to current levels. 

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