Visa (V, news, chart) is seeing double its normal trading volume, as some players seem to be positioning for a post earnings rally. The company is due to report today after the close of trading. 21 analysts currently offer coverage on V and the range of estimates is for earnings per share of between 42 and 48 cents for the quarter. Consensus is 48 cents. In the previous quarter, Visa posted 52 cents, which topped analyst estimates by 8 cents. Shares rose nearly 8 percent on the news. Today, V is trading up $2.03 to $78.00 and 63,000 Visa calls have traded on the day, compared to 26,000 call options. The August 80 and 85 calls are the most actives. More than 20,000 contracts have traded, with roughly 56 percent trading offerside. The heavy volume in the August options, which come off the board in 16 days, suggests that some traders are buying short-term calls in anticipation of some post-earnings strength in V. Meanwhile, mplied volatility in the August options is 65 percent, compared to 52 percent for the September options. The volatility skew hints at a possible gap move of 7.9 percent, or almost exactly the same as the move seen following Visa’s previous earnings report.
About the Author (Author Profile)
Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.