Options Bulls Blast Adobe Stock After Earnings

ADBE is lower today despite a top-line beat

Digital Content Manager
Dec 10, 2020 at 2:43 PM
facebook twitter linkedin

Computer software company Adobe Inc (NASDAQ:ADBE) stepped into the earnings confessional this morning and hit it out of the park. Adobe reported better-than-expected fourth-quarter earnings of $2.81 per share, as well as a revenue beat. In addition, the company hiked its 2021 earnings per share (EPS) forecast, and projected revenue to be above analysts' estimates as well at $15 billion. Nevertheless, ADBE is down 2.1% to trade at $472.76, at last check.

On the charts, the security has been taking a breather from a Sept. 2 all-time-high of $536.88. While the shares have attempted a few rallies since then, overhead pressure at the $500 level has stymied a return to that record high territory. Still, the stock's latest pullback has been contained by the supportive 120-day moving average, and ADBE sports a 57.8% year-over-year lead.

That optimism is reiterated in the options pits, where calls are king. This is per the stock's 10-day call/put volume ratio of 1.49 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 94% of readings from the past year. In other words, calls are being picked up at a quicker-than-usual pace in comparison to the last year.  

Today's news is only reinforcing this bullish sentiment. So far, 26,000 calls and 18,000 puts have crossed the tape, which is three times what is typically seen at this point. Most popular is the weekly 12/11 477.50 strike-call, followed by the 500 strike-call in the same series. New positions being opened at the former, as investors expect more upside for ADBE by the end of the week.




These investors are using the market's volatility to their advantage and scoring triple-digit gains on many of their trades.

Even in today's sideways bear market, this trading strategy has continued to provide consistency and profitability to a small group of investors. By using this approach, these traders are removing directional risk and still hitting triple-digit returns. If you want access to this strategy, and lower risk with higher returns sounds good to you, then don't wait another minute.

Join us now to receive our next trades the moment they come out!


Common mistakes options traders make


Special Offers from Schaeffer's Trading Partners