Following its sixth-best session on record, Airbnb finds itself down more than 6% as it gears up to report earnings for the first time as a public company after the bell on Thursday.
Despite the big swings in sentiment, options traders are largely feeling bullish on the travel stock's debut report. Marriott CEO Tony Capuano saying Wednesday he thinks leisure travel will rebound amid the Covid-19 vaccine rollout undoubtedly led to more optimism in the travel trade, but Airbnb's options have already revealed that many traders expect a bright future for the stock.
"Most of the flow over the course of the last 20 days has been bullish, with calls outpacing puts by [a ratio of] about 2-to-1. That continued today, although not quite as much. Calls outpaced puts by [a ratio of] about 3-to-2 today, and the most active options were the weekly 200-strike calls," Optimize Advisors CIO Michael Khouw said Wednesday on CNBC's "Fast Money."
More than 4,000 of those contracts, which expire at Friday's close, changed hands for an average price of $9 in premium, meaning that buyers of those calls see Airbnb trading at least 4.5% higher from Wednesday's close by the end of the week.
Despite the large volume of these contracts being traded in Wednesday's session, Khouw found evidence that a lot of this bullish activity could be coming from retail traders.
"This is among the many stocks that seems to be popular with people who are trading in small sizes, because the average trade size was just four contracts," said Khouw.