Uber Options Red-Hot Ahead of Earnings

Speculators are targeting at-the-money weekly options that expire tomorrow

Ride-sharing service Uber Technologies Inc (NYSE:UBER) is set to unveil its first earnings report as a publicly traded company after tonight's close, and ahead of the event, the stock is relatively quiet -- last seen down 0.3% at $39.84. UBER's options pits, on the other hand, are buzzing, with volume running at a much quicker-than-usual clip.

By the numbers, around 35,000 calls and 22,000 puts have changed hands on UBER stock so far today, more than double what's typically seen at this point in the session. Most active is the weekly 5/31 40-strike call, which is potentially being bought to open for a volume-weighted average price (VWAP) of $1.40. If this is the case, breakeven for the call buyers at tomorrow's close -- when the weekly series expires -- is $41.40 (strike plus premium paid).

UBER options bears appear to be targeting the $40 level, too, with buy-to-open activity detected at the weekly 5/31 40-strike put. The VWAP on this at-the-money option was last seen at $1.38, which would make breakeven for the put buyers $38.62.

Finally, Trade-Alert highlights a potential short straddle using both the weekly 5/31 40-strike call and put. In this risky scenario, the speculator will be able to pocket the initial net credit as their full reward, should UBER settle right at $40 tomorrow night. More likely, though, they're hoping to profit on a post-earnings volatility crush.

Looking closer at the charts, Uber Technologies stock has had a soft start -- opening for trading at $42 on May 10, below the firm's initial public offering (IPO) price of $45 per share. This marks the highest the equity has ever traded, with UBER tagging its record low of $36.08 the very next day.