Analysts, Options Traders Blast ORCL After Earnings

Options volume is running at 12 times the intraday average, with puts popular

Assistant Editor
Jun 16, 2021 at 10:38 AM
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The shares of Oracle Corporation (NYSE:ORCL) are down 5.1% to trade at $77.44, despite the tech giant reporting better-than-expected fiscal fourth-quarter earnings of $1.54 per share, as well as a revenue beat. Dragging the equity down is the company's current-quarter profit forecast, which came in below Wall Street's consensus, as it increases investment in its cloud computing operations.

Despite this morning's pullback, the brokerage bunch is responding with optimism. The security earned at least nine price-target hikes, including one from Bernstein to $90 from $81. Analysts were skeptical towards ORCL coming into today, though, with 13 of the 19 in coverage carrying a tepid "hold" rating, while six say "buy" or better. Meanwhile, the 12-month consensus target price of $77.62 is a slim 0.4% premium to current levels.

Options traders are responding as well. In the first hour of trading, 65,000 puts and 64,000 calls have crossed the tape already, which is 12 times the intraday average. Most popular by far is the June 75 put, followed by the 78.50 put from the same series. 

Now could be a great opportunity to weigh in on ORCL's next move with options. The stock's Schaeffer's Volatility Index (SVI) of 27% sits in the relatively low 24th percentile of its annual range. This means the security sports attractively priced premiums at the moment. 

Today's negative price action pushed the equity below the 50-day moving average for the first time since mid February. Though ORCL is set to lock in its worst single-day percentage drop since March 11, the security still sports a 20.3% year-to-date lead, with potential support from the 70-day trendline and the $75 mark.

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