To The Moon

Continue our analysis of social stocks today.

$Netflix(NFLX)$

No doubt, continue to buy put, with bulk orders $NFLX 20220520 170.0 PUT$, $NFLX 20220506 190.0 PUT$. 

Still a small position. Netflix's downtrend remains unchanged, but beware of acquisitions and additional investment. There is a time loss in the negative phase, you can also do put spread strategy.

$Snap Inc(SNAP)$

Continue to update our analysis of the two social companies. Yesterday I posted a scary headline, but it turned out to be real. I was also surprised that the first few puts I bought at the opening this morning turned out to be profitable.

But SNAP is more optimistic than FB, and the results aren't that bad.

1. Analysts expect Snap's adjusted EARNINGS per share for the first quarter of fiscal 2022 to increase by $0.01 from $0.00 a year ago. Revenue is expected to grow 39.0% year-over-year, the slowest pace since the second quarter of fiscal 2020.
2. For the full fiscal year 2022, adjusted EPS is expected to be positive for the second consecutive year, with annual revenue growth of 37.1%. That would be the slowest pace of income growth in at least four years.
3. Analysts expect the company's DAU to rise, but at a slower pace than in recent quarters.

It's true that expectations for SNAP are low this time, but earnings aren't going to fall 20%. So even though I bought Put, I don't expect much from Snap.

SNAP fell 23% last quarter due to FB earnings. When the results came out and everyone realized it wasn't that bad, the stock did a spectacular 58% jump. The stock went from $32 to $38.9, which would have been a normal earnings gain if not for that much shorting.

In terms of large order distributions, basically call spreads, strangle, out-of-the-money puts: 

Call spreads lock in the upside limit, no more than $38: $SNAP 20220422 38.0 CALL$ $SNAP 20220422 42.0 CALL$ ;

Strangle,ATM PUT + OTM CALL:  $SNAP 20220422 30.5 PUT$  $SNAP 20220520 36.0 CALL$ ;

PUTS : $SNAP 20220422 28.0 PUT$

Of course, there is also a very confusing Calendar or Reverse Calendar Spread: $SNAP 20220422 35.0 CALL$ $SNAP 20220429 35.0 CALL$

It's fair to say that the market is putting too much volatility on SNAP earnings, and that implied volatility is the highest I've seen so far. That week it reached more than 300%, far higher than Netflix and Tesla, but the exercise price is conservative, is also quite strange.

$Meta Platforms, Inc.(FB)$

Compared to SNAP, FB is bluntly bearish:

• Management expects revenue to slow further in the first quarter of 2022, with revenue growth of only 3% to 11%

Which one would you like to do: $FB 20220715 175.0 PUT$ $FB 20230120 160.0 PUT$ $FB 20220715 185.0 PUT$

Semiconductor

$AMD(AMD)$earnings bearish more obvious. Target price below $95, above $80: $AMD 20230120 95.0 PUT$ $AMD 20220617 80.0 PUT$

Intel$Intel(INTC)$ is extremely cheap, with a PE of less than 10. But PE is cheap and earnings do not fall is not necessarily related. Large orders are chaotic, with price extra PUT and forward parity call. In this case, trust the one who buys more: $INTC 20220617 50.0 CALL$

Is a bulk order always reliable?

Not certain, specific stock still needs specific analysis. $American Airlines(AAL)$ by the large order to do definitely over.

Delta company earnings benefit from the macro situation more than expected to rise, in this case, it is not reasonable to bet on the same industry companies fell.