Meta Stock Drawing Pre-Earnings Options Buzz

Meta Platforms Inc (NASDAQ:META) stock was downgraded to "neutral" from "buy" at New Street earlier, with the analyst in coverage citing its recent rally as well as "better opportunities" in the market. Last seen down 1% at $219.29, the security is on track to snap a three-day win streak. META still sports an 82.1% year-to-date gain, though, with support from the 20-day moving average. On Friday, the equity also logged its highest close since May.

Today's bear note comes ahead of the Facebook parent's first-quarter earnings report, due out after the close next Wednesday, April 26. The shares have finished five of the last eight next-day sessions lower, but did log a 23.3% pop in February. In the last two years of post-earnings reactions, META averaged a move of 14%, regardless of direction, but the options pits are pricing in a smaller-than-usual swing of 11.5% this time around.

Options traders have been active. META is featured on Schaeffer's Senior Quantitative Analyst Rocky White's list of stocks that attracted the highest weekly options volume in the last 10 days. The stock saw 2,341,048 calls and 1,538,812 puts traded, with the weekly 4/14 220-strike standing out as the most popular contract.

  

Short-term options traders lean heavily bearish, however, per Meta Platforms stock's Schaeffer's put/call open interest ratio (SOIR), which sits in the 96th percentile of annual readings. This suggests the security could still benefit from a shift in sentiment.

Options are certainly the route, per the security's Schaeffer's Volatility Scorecard (SVS) of 85 out of 100. This means META has exceeded option traders' volatility expectations during the past year -- a boon for options buyers.