Google Inc. (GOOGL) Calls Hot Ahead of Earnings

Google Inc (NASDAQ:GOOGL) will report first-quarter earnings after tonight's close

by Karee Venema

Published on Apr 23, 2015 at 1:47 PM
Updated on Apr 23, 2015 at 1:51 PM

With its new mobile-friendly algorithm in place and the launch of its wireless service underway, Google Inc (NASDAQ:GOOGL) will move on to its next order of business this week -- quarterly earnings. The company is set to report after tonight's close, and ahead of the big event, speculators are piling into the equity's options pits. By the numbers, 21,000 calls have changed hands today, versus 12,000 puts, representing 1.6 times GOOGL's average intraday volume.

Most active is the security's weekly 4/24 600-strike call, and it appears some of today's activity could be of the buy-to-open kind. For those initiating long calls here, the goal is for GOOGL to rally above the round-number $600 mark by tomorrow's close -- when the weekly series expires -- territory not explored since last September.

Widening the sentiment scope reveals today's call-skewed session is just more of the same for a stock that's up nearly 14% from its Jan. 12 annual low of $490.91 to trade at $558.72. In fact, the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.77 rests lower than 65% of all similar readings taken in the past year, meaning short-term speculators are more call-heavy than usual toward GOOGL. In the weekly 4/24 series, specifically, peak call open interest can be found at the 590 strike, where 2,512 contracts are currently in residence.

Historically speaking, GOOGL has averaged a single-session post-earnings move of 4.9%. This time around, the stock's near-the-money straddle is pricing in a move of 3.9%. Meanwhile, for Google Inc's (NASDAQ:GOOGL) first quarter, Wall Street is calling for a per-share profit of $6.60.


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