Options Bulls Latch Onto Lyft Stock Ahead of Earnings

The rideshare name has been underperforming on the charts

Deputy Editor
May 3, 2022 at 12:42 PM
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Lyft Inc (NASDAQ:LYFT) is seeing an options surge, as traders target the stock ahead of the company's first-quarter earnings report, due out after the close today. So far, 54,000 calls and 29,000 puts have been exchanged, which is six times the intraday average. The weekly 5/6 35-strike call is the most popular, with new positions being bought to open there. 

Call volume is nearly doubling put volume today, showing options traders are remaining bullish ahead of the earnings event. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), LYFT sports a 50-day put/call volume ratio of 3.25, which sits higher than 96% of readings from the past year. In other words, options traders have been picking up long calls at a much quicker-than-usual clip of late.  

These traders are expecting a bounce from the underperforming rideshare name, which is still trading near yesterday's 18-month low of $29.93. Down 2.6% to trade at $30.67 at last glance, LYFT is sporting a 28% year-to-date deficit. On the charts, the equity's 100-day moving average has helped guide it to these lows. 

LYFT May3

Looking at Lyft stock's post-earnings history, the security has managed a positive next-day swing after five of its last eight reports. This time around, the options pits are pricing in a post-earnings return of 20%, which is much higher than the 8.1% move the stock has averaged over the last two years, regardless of direction. 

It's also worth noting that short interest represents 8.3% of the stock's available float. At the stock's average pace of trading, it would take nearly four days to buy back these bearish bets. 

 

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