Momo Stock Moves Lower Ahead of Quarterly Report

Put are running at double the usual volume in the options pits

Deputy Editor
Mar 24, 2021 at 3:47 PM
facebook twitter linkedin


China-based social networking name Momo Inc (NASDAQ:MOMO) is down 5.8% at $14.46 at last check, ahead of its fourth-quarter earnings report, which is due out before the open on Thursday, March 25. The equity has been cooling off since its mid-February five-month peak, and is now trading at its lowest level since mid-January. Year-to-date, the equity is up 3.2%. 

MOMO0324

Options traders are chiming in ahead of the event, with puts running at double the usual volume. So far, 11,000 calls and 7,368 puts have crossed the tape, with the weekly 4/23 12.50-strike put -- where positions are currently being opened -- seeing the most activity. 

Over the past 10 weeks, the options pits have been firmly in the bullish camp. This is per MOMO's 50-day call/put volume ratio of 18.40 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 98% of readings from the past year. 

Analysts are split on Momo stock, with three of the six in coverage carrying a "strong buy" rating, and the remaining three calling it a "hold" or worse. Meanwhile, the 12-month consensus price target of $19.89 is a 37.5% premium to current levels.

A look back at its past eight reports shows a split post-earnings response for MOMO, which has ended 50% of the these next-day sessions higher. The security has averaged a post-earnings swing of 7.2% in the last two years, regardless of direction. This time around, the options market is pricing in a much bigger move of 13%. 

 

Now is the time to join our thriving community of Event Traders who consistently profit from every earnings season. With this discounted subscription opportunity, you'll stay ahead of the curve and seize opportunities others miss. Do not let Q3 earnings season pass you by – subscribe now and supercharge your portfolio with expert insights that turn market reactions into profit-generating opportunities!! Don't waste another second... join us right now before the next trade targeting +200% is released!