The pot producer is expected to post its first-quarter earnings report next Friday, May 8
The shares of Cronos Group Inc (NASDAQ:CRON) are climbing higher today, up 6.4% at $6.60 at last check, set for their first close north of the 80-day moving average since mid-February. The marijuana producer just announced plans to release its first-quarter earnings report next Friday, May 8, and options players are placing bets on CRON ahead of the event.
So far, 17,000 calls have crossed the tape -- three times the intraday average -- compared to 3,188 puts, which are also running at a slightly quicker clip than usual. The two most popular contracts are the weekly 5/1 7- and 6.50-strike calls, with positions being opened at both. However, the monthly May 7 call, which expires on May 15, after CRON's May 8 earnings report, is also seeing plenty of action today.
This suggests that these traders are expecting CRON to overtake the $7 level, which hasn't been breached since the shares' Feb. 24 bear gap. Since then, the stock has been trading sideways, though support at the 20-day moving average has helped guide Cronos stock to a 16.3% gain for the month.
Cronos' earnings history, meanwhile, is pretty dismal. Looking back, CRON has closed lower the day after the company reports during the last eight quarters, including a 10.6% plummet in March. During the past two years, the stock has averaged a post-earnings swing of 4.6%, regardless of direction. This time around, the options market is pricing in a much bigger 19.4% move for Tuesday's trading.