Earnings
Tuesday, January 28th 2025
Will Meta Surprise Again? ORATS Data Shows Traders Are Bracing for Volatility
Meta’s implied earnings move is significantly lower than historical volatility—are options traders overlooking a potential breakout? ORATS data reveals key positioning trends ahead of the report
Summary
Meta's upcoming earnings report is anticipated to show a 17% YoY revenue increase, but the implied volatility of 6.8% is significantly lower than the historical average of 13.2%. Traders are positioning bullishly, indicating potential for a larger-than-expected price swing post-earnings.
Meta (META) is set to announce earnings after the close on Wednesday, January 29, 2025, and the ORATS dashboard is revealing some intriguing pre-earnings trends. With traders positioning aggressively in options, implied volatility ticking up, and a history of explosive earnings moves, there’s plenty for options traders to dissect.
Implied vs. Actual Move: A Major Discrepancy
The ORATS dashboard is showing that the implied move of 6.8% is well below META’s average actual earnings move of 13.2% over the last 12 quarters. That’s a meaningful gap, especially considering the stock has seen four separate moves over 20% in the past three years of earnings reports. META has seen four separate earnings-related moves exceeding 20% in just the past three years, making the current implied move of 6.8% look historically low.
This suggests that options pricing may be underestimating the potential for volatility, creating opportunities for traders looking to position for a larger-than-expected swing.
Big Trades: Long Delta, Long Premium, and Profitable
Today’s largest trades indicate that traders are very long delta and long premium, suggesting a strong bullish bias heading into earnings. The stock is already up +2.61% on the day, and implied volatility is also on the rise—both favorable conditions for these positions.
- Net Notional Delta: +327.8 million
- Total Premium Bought: $140.4 million
- Total Premium Sold: $24.4 million
- Total Profit: $2.2 million
The combination of long options positioning and rising implied volatility suggests that traders could be setting up for a post-earnings continuation move rather than simply hedging. With both price and IV rising, traders who positioned early in long options premium are seeing gains, a sign of potential bullish continuation.
Earnings Expectations: A 17% YoY Revenue Jump
Meta’s earnings report is expected to show a 17% year-over-year increase in advertising revenue, bringing it to $45.43 billion. Analysts also project earnings per share (EPS) to rise 29% YoY to $6.90.
Key factors influencing the upcoming report:
- Ad spending trends: A rebound in digital ad demand could fuel stronger-than-expected growth.
- User engagement: Meta’s ability to drive ad impressions across platforms like Instagram and Reels remains critical.
- Privacy policy changes: Any updates on data-tracking policies could impact future revenue forecasts.
Takeaway: Is the Market Underpricing Risk?
With traders going long delta, volatility creeping up, and historical moves nearly double the current implied move, the ORATS dashboard suggests that options pricing may be too complacent about potential earnings volatility. For traders looking to structure pre-earnings positions, historical patterns suggest there could be value in long-volatility strategies.
Stay tuned for post-earnings analysis as we break down the results and how they compare to market expectations.
Want to track real-time pre-earnings trends like this? Start analyzing earnings moves like a pro—access ORATS’ real-time dashboard now.
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