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Options Traders Gear Up For Tiffany & Co Earnings

Published 06/04/2019, 01:57 AM

High-end jeweler Tiffany & Co. (NYSE:TIF) is moving up the charts this afternoon, as traders climb on ahead of the company's first-quarter earnings report, slated for release before the market opens tomorrow, June 4. Below, we will take a look at how TIF has been performing on the charts, as well as what the options market has priced in for the stock's post-earnings moves.

At last check, Tiffany & Co stock is up 1% at $90.01, potentially turning a corner after a recent downtrend on the charts. The stock's latest leg lower was sparked by a late-April rejection at its 320-day moving average, which sent TIF spiraling back below the $87 mark for the first time since early February last week. Longer term, however, the equity is 12% higher year-to-date.

Daily TIF Since Jan With 320MA

Digging into Tiffany's earnings history, the stock has only closed higher the day after earnings in three of the last eight quarters -- including a 23.3% surge this time last year, as well as a 3.1% gain in March. Over the past two years, the shares have swung an average of 7% the day after earnings, regardless of direction. This time around, the options market is pricing in a larger-than-usual 11.1% swing for Tuesday's trading.

With the stock's recent trading history, puts have been popular among options traders. This is per TIF's 10-day put/call volume ratio of 1.89 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks in the lofty 80th annual percentile. In other words, puts have been purchased over calls at a faster-than-usual clip.

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Regardless of whether it's calls or puts, though, the retail stock has been an attractive target for premium buyers in the past year. Specifically, Tiffany's Schaeffer's Volatility Scorecard (SVS) of 82 out of a possible 100 suggests TIF has regularly exceeded options traders' volatility expectations over the last 12 months.

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