Options Traders Bet on Activision Blizzard Stock Soaring After Earnings – Schaeffers Research (blog)

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Video game developer Activision Blizzard, Inc. (NASDAQ:ATVI) is down 2% today at $61.16, but options data suggests traders are expecting the stock to bounce back in a big way after earnings tomorrow afternoon. During the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), ATVI has a 10-day call/put volume ratio of 7.54, which ranks in the 94th annual percentile. Said simply, there’s been greater-than-usual demand for bullish options bets. 

Maybe not surprisingly then, the top open interest position is the August 67.50 call. Data from the major options exchanges confirms substantial buy-to-open activity at this strike, meaning traders expect ATVI shares to top $67.50 by the close on Aug. 18, when the contracts expire. That’s a 10.4% premium to current levels. 

That’s far from the only front-call to see heavy attention in recent weeks. In fact, five of Activision Blizzard’s top 10 open interest levels belong to calls in the August series. 

ATVI stock does have a history of making big moves after earnings. Back in February, the shares surged 18.9% in the session after the company reported. Moreover, the security has averaged a swing of 7% after earnings, going back eight quarters. 

Optimism is high outside the options pits, too. Short interest is basically nonexistent, and 13 of 16 analysts say to buy Activision Blizzard stock. It’s hard to argue when ATVI is up almost 54% over the past 12 months. 

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