Options traders are betting bullishly after the e-tailer's earnings
Temu and Pinduoduo parent PDD Holdings Inc (NASDAQ:PDD) reported lower-than-expected fourth-quarter earnings and revenue before the open today, dinged by stiff competition and weak demand in China. The company still doubled its annual profit to $15.4 billion, however.
At last glance, PDD was up 2% at $128.48, reversing its earlier losses and brushing off a price-target cut from Jefferies to $156 from $171. Familiar pressure at the $130 level is keeping gains in check, however. Year-to-date, the equity is outperforming the broader market with a 32.5% lead.
Over in the options pits, PDD has seen 57,000 calls and 40,000 puts exchanged, which is quadruple the overall volume typically seen at this point. The March 135 and 130 call contracts are the most popular, with new positions opening at the weekly 4/25 128-strike put.
The e-commerce name has tended to outperform options traders' volatility expectations over the past year, per its Schaeffer's Volatility Scorecard (SVS) of 97 out of 100.