Facebook Inc. - Class A (FB) just reported earnings on January 30, 2019, after the market closed. Earnings Per Share (EPS) was reported at $2.38, after analysts had expected $2.19 per share. As a result, FB opened up +10.1%, and closed for the day up +12.5% at 169.04. Since earnings was reported, the stock has traded in a range from 165.00 to 171.68.
Price Volatility Against Expectations
Ahead of earnings, option traders were expecting a ± 6.9% move for this date, so the earnings move of +12.5% represents an outsized move against the market. FB has experienced 5 other larger-than-expected earnings moves in the last 12 quarters.
Earnings Price Patterns
3 Days After Earnings:For 5 of the last 6 quarters (83%), FB stock price has gone down in the 3 days following earnings. It has had an average loss of -1.3% during that span.
2 Days After Earnings:For 5 of the last 6 quarters (83%), the stock price has gone down in the 2 days following earnings. Over that period, it has an average loss of -1.9%.
Earnings Option Strategies
MarketChameleon's option strategy analysis
shows that selling out-of-the-money calls one day after earnings and buying them back one week after earnings had 92%
winning occurrences, for an average gain of +75.4%
. Additionally, selling at-the-money straddles resulted in 75%
winning occurrences, for an average return of +19.8%