Options data points to big-tech optimism before earnings

Options traders are paying up for upside exposure in several big tech names heading into earnings season, according to CNBC’s report on data from Nations Indexes. For everyday investors, that matters because these stocks carry enough weight to influence whether the S&P 500 can push toward another record.

The signal comes from Nations Indexes’ RiskDex, a measure of options pricing skew. A call option gives the buyer the right to purchase a stock at a set price, while a put option gives the buyer the right to sell. When comparable calls cost more than puts, traders are paying more for potential gains than for protection against losses.

RiskDex looks at one-standard-deviation out-of-the-money options, meaning contracts with strike prices outside the current trading range by a statistically meaningful amount. CNBC reported that the measure compares call prices with equivalent put prices, then checks whether that bullish tilt is unusual for that specific stock over the past year.

That second step matters. A stock can often have expensive calls if investors frequently chase upside in the name. RiskDex is looking for cases where call demand is high compared with the stock’s own history, not just high in absolute terms.

Meta and Microsoft lead the screen

Meta Platforms and Microsoft ranked highest in the CNBC analysis based on Nations Indexes’ RiskDex metric. Amazon, Tesla and Advanced Micro Devices followed.

Meta’s RiskDex reading was 0.75, which CNBC said means one-standard-deviation out-of-the-money calls were 25% more expensive than matching puts. That was the lowest score in the screen, but it sat in the 91st percentile of call-heavy readings for Meta over the past year.

Microsoft’s reading was 0.79, according to CNBC, placing it in the 93rd percentile of the stock’s one-year range. Amazon’s RiskDex was 0.98, meaning calls were only slightly more expensive than puts, but the reading still landed in the 92nd percentile for Amazon’s own history.

Tesla and AMD also showed elevated bullish options skew versus their 52-week records, CNBC reported. Both stocks had ratios near 0.9 and ranked above the 80th percentile compared with their own prior readings.

A crowded bullish trade can cut both ways

Scott Nations, president of Nations Indexes, told CNBC he views a broad cluster of call-heavy positioning as a contrarian signal. In his view, the level of bullishness suggests investors may have set a high bar for earnings, leaving stocks vulnerable if results or guidance fall short of expectations.

Nations pointed to Nvidia as an example, telling CNBC that the company delivered strong numbers but the stock still faded afterward. His point was about positioning: when traders have already paid for a strong outcome, even good news may not be enough to support the share price.

If Meta, Microsoft, Amazon, Tesla and AMD do rise after earnings, CNBC noted that it would mark a shift in market leadership. Meta and Microsoft have not reached records in nearly a year, while Amazon has lagged the Nasdaq 100 so far this year.

The read-through for investors is straightforward: options markets show enthusiasm for a big-tech earnings rebound, but that enthusiasm also raises expectations. Earnings season will test whether company results can match the price already embedded in the options market.

This story draws on original reporting from CNBC.