On Wednesday, Facebook Inc. (NASDAQ:FB) will report its quarterly earnings after the market’s close.?
As options traders anticipate the report, they have been pricing Facebook options with a limited reaction, possibly with an even smaller response than usual, reported The Wall Street Journal’s Kaitlyn Kiernan.?
On Monday,?Facebook?s implied volatility dropped for a fourth consecutive trading day to 18% lower than where the stock was before its previous quarterly report.?
Ophir Gottlieb, managing director at options-data firm LiveVol Inc, said via the WSJ,??Facebook shares have been reacting less and less off of each subsequent earnings reports, and in between earnings, the shares have been less volatile. On top of that, the general market has been moving higher and the VIX is down, so there is less systemic risk.?
On Monday, Facebook shares hit a two-week high and on Tuesday, the stock is currently trading at $27.33. It is up 2.72% year-to-date.
Its thirty-day implied volatility also fell 4.1% to 47.44 on Monday, as noted by to LiveVol data. This represents its lowest number for two weeks and over the last four trading sessions, a 9.7% decline.
As compared to last quarter’s numbers, two days prior to Facebook?s earnings, the measure increased to 57.77, then peaked to 62.17 when the day came for results to be released.
Also on Monday, reported Kiernan, the?options market’s two biggest Facebook trades come in a ?strangle,? which suggested a small movement in shares relative to a profit.
Looking to this quarter’s report, analysts have estimated eight cents per share earnings from revenue of $1.44 billion. Wednesday’s report will come right before the company’s first birthday as a publicly-traded company.?
In other Facebook news on Tuesday as investors prepare for Wednesday’s report,?RBC analyst Mark Mahaney wrote about concerns over the company’s monthly unique visitors in a research report.
Citing ComScore data, wrote MarketWatch, Mahaney found that Facebook?s monthly unique visitor growth had ?decelerated? in January and February. He added that ?minutes per user declined relatively steeply, suggesting potential dis-engagement by Facebook users. These trends were more pronounced in Facebook?s most mature markets.?