Bank stock Charles Schwab Corp (NYSE:SCHW) is trading at record highs this morning, up 4.6% at $97.50 at last glance, after the company's better-than-expected second-quarter results. Earnings of $1.14 per share beat estimates of $1.09, while record revenue of $5.85 billion surpassed estimates of $5.73 billion. The firm said it opened more than 1 million new brokerage accounts this quarter, gathering $80.3 billion in new core assets. 

On the charts, SCHW has been on the rise since early April, and now sports a 31% year-to-date lead. Support at the 40-day moving average has helped guide the stock higher in recent weeks. 

Over in the options pits, 21,000 calls and 13,000 puts have been exchanged, which is 8 times the overall options volume typically seen at this point. Expiring today, the July 95 put is the most popular contract, with new positions being bought to open there. 

 

 

The shares of Netflix Inc (NASDAQ:NFLX) are down 4.5% to trade at $1,217.08 at last check, despite the streaming giant reporting a 46% profit increase for the second quarter and a 16% revenue jump. The company also hiked its full-year revenue outlook, with top- and bottom-line results surpassing estimates.

The security is also brushing off no fewer than 15 price-target hikes, including one from Wells Fargo to $1,560 from $1,500. The majority of analysts already lean bullish toward NFLX, with 30 of the 45 in question sporting a "buy" or better rating.

Netflix stock is on track for its third loss in the last four sessions, as well as its worst day since March 28. Support at the $200 level looks ready to contain losses, however, as it did last month. Though the equity is now distancing itself from its June 30, record high of $1,341.15, it still sports an 88.4% year-over-year lead.

Over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OM X PHLX (PHLX), the stock's 50-day put/call volume ratio of ranks higher than 98% of readings from the past year. This means  options traders have been more bearish than usual on NFLX.

Drilling down to today's options activity, 107,000 calls and 92,000 puts have already crossed the tape so far, which is 7 times the volume typically seen at this point. Most popular is the July 1,200 call, where new positions are being opened. These contracts are set to expire after today's close.

Electric vehicle (EV) stock Lucid Group Inc (NASDAQ:LCID) is surging today, up 38.8% to trade at $3.18 at last check, after the company announced Uber Technologies (UBER) will invest $300 million in a robotaxi deal. The rideshare giant will acquire and deploy over 20,000 Lucid Gravity SUVs equipped with autonomous vehicle (AV) capabilities over six years, starting in 2026.

The deal is providing tailwinds for other EV companies, with the shares of Nio Inc - ADR (NYSE:NIO) and Xpeng Inc - ADR (NYSE:XPEV) also moving higher. Below, we will check in on these stocks' most recent price action, as well as today's options activity.

To be sure, LCID is still well within penny stock territory, despite being on track for its best single-day percentage gain since January 2023. Shares are trading at their highest level since February and have added 32.3% in the past three months, though they still carry a 16.8% year-over-year deficit.

NIO is still a penny stock, too, up 6.9% to trade at $4.39 at last glance -- its highest level since March. The equity is on track for its fifth gain in the last six sessions, but has shed 14.6% over the last nine months, and is losing steam around at familiar pressure around the $4.50 level.

XPEV sports a more modest gain, last seen up 2.3% to trade at $18.34, and pacing for its fourth-straight daily gain. Far more stable than its peers, the security sports a 55.3% lead for 2024, and an even more impressive 113.4% year-over-year gain, with long-term support stemming from the 160-day moving average.

LCID and NIO are being blasted in the options pits today, with overall volume running at 16 times and triple what is typically seen at this point, respectively. Most popular for the former is the July 3.50 call, while for the latter the weekly 7/25 5-strike call is leading the way, with positions opening at both. 

Retail stock Williams-Sonoma Inc (NYSE:WSM) was last seen up 3.3% at $170.40, rebounding from its recent slide. The $180 level has given WSM some trouble for the past couple months, but this next run could finally push the stock above it. Per Schaeffer's Senior Quantitative Analyst Rocky White, the recent pullback has the equity within striking distance of its 50-day moving average, a historically bullish signal. 

More specifically, the stock is within 0.75 of the 50-day trendline's 20-day average true range (ATR) after spending at least 80% of the last 10 days and 80% of the last two months above it. Within these parameters, 11 other signals occurred in the past three years. WSM was higher one month later 82% of the time following these events, averaging a 7% gain. A move of similar magnitude from its current perch would put the shares above $182. 

Furthermore, though short interest has just begun to slowly unwind, it still represents 5% of the stock's available float, or over three days' worth of pent-up buying power, at WSM's average pace of trading. 

Options traders are pricing in low volatility expectations, per WSM's Schaeffer's Volatility Index (SVI) of 39%, which ranks in the low 4th percentile of its annual range. It's also worth noting that the stock has tended to outperform these volatility expectations, per its Schaeffer's Volatility Scorecard (SVS) of 82 out of 100.  

Coca-Cola Co (NYSE:KO) stock is 0.6% higher to trade at $69.66 today, rising slightly after President Donald Trump announced the company will start using cane sugar in its beverages, though Coca-Cola did not corroborate the news. Today's gains could also be attributed to PepsiCo (PEP) vaulting up the charts after the sector peer's top-line beat for the second quarter.

Whatever the reason, KO is poised to stay in the spotlight next week, when the blue chip reports second-quarter earnings before the market opens on Tuesday, July 22. The stock has a rather muted history of post-earnings reactions, only adding 0.8% on April 29 and 0.3% a year ago in July 2024. The equity averages a post-earnings move of only 1.6% in the last eight quarters, but for Tuesday's trading, the options market is pricing in a larger-than-usual move of 3.6%. 

Coca-Cola stock has traded sideways most summer, but is the 12th-best Dow name this year, up 11.9% year-to-date. The shares have support in place at their 200-day moving average, though overhead there are two descending trendlines that could cap a breakout, per the chart below.

Should KO falter in the earnings confessional, analysts may adjust their stance. Of the 23 brokerages covering the security, 22 maintain a "buy" or better, with zero "sells" on the books. Plus, the consensus 12-month price target of $77.91 is a nearly 12% premium from its current perch.

Another earnings season kicked off this week, with financial services giants taking the confessional by storm, and many more companies lined up to report quarterly results in the coming weeks. This makes now  excellent time to dive into what these reports entail, and why they're relevant. 

First things first: Publicly traded companies file an earnings report each quarter, as an event with a set date. The quarters are simply three-month periods, with reports being released every January, April, July, and October (for those not under their own fiscal schedule).

The reports break down each company's quarterly profits/losses, revenue, expenses, and any other financial metrics deemed materially relevant by the company's big wigs. Quarterly reports may also include a forecast for the coming quarter or the remainder of the fiscal year, and could list something like a dividend increase or decrease. Sometimes big updates or news from the reporting company may also be added to the mix (such as C-suite updates).

These financial updates are extremely relevant, as they give shareholders an in-depth look at how the company managed over the past few months, and allow the opportunity to compare to previous quarters, so as to better understand how the company may fare going forward.

Sell-side analysts, meanwhile, chime in before the release of such reports, and issue their estimates or a company's expected earnings or losses in the relevant quarter. The estimates are gathered, averaged, and put into a consensus forecast which is used as a benchmark against the final results. 

For the most part, publicly traded companies report their earnings according to Generally Accepted Accounting Principles, or GAAP, which refers to a uniform standardized set of industry-wide accounting procedures -- ensuring a consistent methodology. However, a company may also issue non-GAAP, or "adjusted," results, which often exclude certain one-time events, charges, or financial gains. The non-GAAP figure is what's typically compared against analysts' estimates. 

As previously mentioned, earnings releases more often than not have a set date. So, investors can take advantage by playing options before the earnings announcement, or after the report has been released. The former can be risky, but may yield large profits if the directional move is correctly predicted.

Meanwhile, jumping in with options after the release could set the investor on track with long-term directional movement. As such, initiating an options trade beforehand can be just as profitable as a pre-earnings move. 

PepsiCo Inc (NYSE:PEP) stock is 6.3% higher to trade at $143.88 this morning, after the company posted adjusted second-quarter earnings per share (EPS) of $2.12 on revenue of $22.73 billion, beating estimates of $2.02 and $22.27 billion. The results have PEP brushing off lagging U.S. sales and a smaller-than-expected annual outlook.

Today's bull gap has PepsiCo stock breaking above the overhead 80-day moving average. Now on track for its best daily performance since March 26, 2020, PEP is pacing for its highest close since late April. Year-to-date, the equity is down 5.4%.

Options traders are targeting PEP in response, with 62,000 calls and 32,000 puts exchanged so far. This represents 4 times the stock's average daily volume, with the July 145 call and October 150 call seeing the most attention.

Zooming out, options traders have been bearish on the security of late. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OM X PHLX (PHLX), PEP's 10-day put/call volume ratio of 1.21 ranks higher than all other readings from the past year.

Echoing this, short-term traders are also sporting a put-bias. This is per the security's Schaeffer's put/call open interest ratio (SOIR) of 1.55, which stands in the highest possible percentile of readings from the past 12 months. 

 

Starbucks Corp (NASDAQ:SBUX) stock is down 0.6% to trade at $92.01 at last glance, after suffering a downgrade from Jefferies to "underperform" from "hold." The brokerage firm cited valuation concerns, as well as the coffee chain's "questionable strategic priorities." This bear note comes after the company declared a quarterly dividend of 61 cents per share.

There's plenty of room for more analysts to strike a bearish tone. Coming into today, 17 of 32 of the firms in coverage carried a "buy" or better rating. Plus, the 12-month consensus target price of $93.01 is still a slim premium to current levels.

SBUX is on track for its fifth loss in six sessions, after yesterday scraping by with a 0.03% gain. The security ran into resistance at $96 again last week, after getting rejected at this trendline last month, and is slipping below the 20-day moving average. The $90 region looks ready contain losses, though, and year over year shares still sport a 22% lead.

Over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OM X PHLX (PHLX), the stock's 50-day call/put volume ratio of 2.37 sits higher than all readings from the past year. This means an unwinding of optimism could further pressure SBUX.

It's also worth noting the equity has tended to outperform analysts' volatility expectations during the past year. This is per its Schaeffer's Volatility Scorecard (SVS) of 98 out of 100.