Schaeffer's Top Stock Picks for '25

Options Traders Nail AKAM Stock's Post-Earnings Move

Call buying dominated in the weeks leading up to earnings

Feb 7, 2018 at 9:45 AM
facebook X logo linkedin


Options traders are cheering well-received earnings from Akamai Technologies, Inc. (NASDAQ:AKAM), with shares of the cloud stock up 7.2% this morning at $68.25. Call buying was extremely popular leading up to the event, evidenced by a 10-day call/put volume ratio of 4.63 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), a reading that ranks in the high 88th annual percentile.

Looking closer, calls accounted for the four largest increases in open interest during the past two weeks, with the weekly 2/9 70-strike call leading the way. The 66-strike call from the same series was also popular, as were the traditional front-month February 67 and 70 calls. All of these contracts saw buy-to-open activity, indicating traders were betting on an upside move from AKAM stock.

Analysts, meanwhile, are jumping on the bullish bandwagon this morning. A flurry of price-target hikes have come through since yesterday's close, with the highest mark of $84 coming from Craig-Hallum. Still, 11 of the 16 brokerage firms tracking the security say it's a "hold" or worse, so there's seemingly plenty of room for more bullish analyst attention.

Turning to the charts, the $68-$72 range has acted as technical resistance for Akamai Technologies' past two breakout attempts, but more recently the tech stock has enjoyed the support of its fast-rising 50-day moving average. Even before today, the security was up almost 35% in the past six months alone, thanks in part to a vote of confidence from the hedge fund community in December.

akam stock price

Of course, big moves from the equity is nothing new. The shares have made double-digit percentage moves the day after earnings six times in the past two years. This knack for volatility is further confirmed by AKAM's Schaeffer's Volatility Scorecard (SVS) of 89, showing it's regularly made bigger moves than the options market has priced in over the past year.
 
 

You have the chance to join one of Bernie's most exclusive programs, complete access at HUGE savings!

As we prepare for a new administration to take the reins in Washington, the near-term market landscape is rife with uncertainty.

The Federal Reserve has already hinted at the turbulence ahead, lowering its interest rate outlook for 2025.

Meanwhile, breakthroughs in artificial intelligence (AI), quantum computing, and other transformative sectors have unlocked incredible profit potential.

But these opportunities are fleeting, and timing is everything. That's where Quick-Hit Trader comes in.

Quick-Hit Trader is designed for precision and speed, getting you in and out of the market in a flash. While other investors scramble to navigate volatile conditions, you'll have access to expertly curated trades that leverage these rapid shifts to deliver explosive profits in short order.

This is your chance to capitalize on the fast-moving market like never before. Are you ready to make your move?