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Options Action

Options bears are flooding into Uber ahead of earnings

VIDEO2:0402:04
Options traders bet on Uber skidding lower out of earnings

Uber doesn't have a shot at matching Lyft's wild post-earnings surge when the ride-hailing giant reports after the bell, if you're to believe the options market. 

Uber's main competitor shot up more than 15% at its after-hours highs following Wednesday's earnings report. Even though Uber caught a bid in extended trading and rode it into Thursday's session, Optimize Advisors President Michael Khouw explained that the dominant view in the options market is still bearish on the stock.

"Uber is implying a move of about 10% [in either direction] when they report earnings. That's about in line with what they moved the last time, and we did see puts outnumber calls by about 2-to-1," Khouw said Wednesday on "Fast Money."

Fittingly, Wednesday's most active options contract in Uber was a bet that the stock could plunge through that 10% implied move by Friday.

"The most active weekly options were those 25-strike puts. Buyers of those were spending about 65 cents for those," said Khouw. "That would be a bet that the stock could move by at least 10% or so to the downside."

More than 5,000 of those contracts changed hands on Wednesday, but, as Khouw would point out, Lyft's positive post-earnings impact on the stock makes these bets much more speculative.

"After Lyft beat [Wednesday] afternoon, and the stock went up, so did Uber, so those are a little bit further out of reach."

As of Thursday, those contracts are about 19% out of the money, breaking even at an underlying stock price of about $24.35.

Uber was trading about 9% higher during Thursday's session. 

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