Quick Look at $CSTR Options Into Tonight’s Q4 Print

by Kristen February 7, 2013 3:21 pm • Commentary

We have gotten a few questions on CSTR into their Q4 earnings tonight after the close so we thought we would give you a sense of how the options market is viewing the event. The implied move of about 13% is above the 4 qtr avg move of ~9%.

Options activity has been brisk today in front of the print:



The largest trade was a buyer of 4500 of the Feb16 57.5/62.5 call spreads. This seems to be a bullish trade, although with short interest of 43% it could be protection for a short stock position. IV30is  inching toward 74 is the highest on the year, and the Feb16 50 straddle is priced at $7.

cstr vol
Red is IV30, Light Blue is HV30 and Dark HV60


The stock rallied a bit with NFLX earnings in late January.

cstr stock

Much of the discussion on media has been about this relationship whether it should be direct or if Netflix’s success should hurt competitor Coinstar. Coinstar does kiosks that turn coins into paper money, Redbox DVD kiosks and mail-delivery and is starting Redbox Instant Streaming with Verizon, but apparently this service has had some snafus and limited titles as well as increasing competition. The CEO will be retiring at the end of March.

The three previous earnings have seen some down moves.

cstr earnings


With a 48 point vol skew between the first and second month at the moneys, CSTR is keeping people guessing for this earnings.  An upward move could definitely lead to a short squeeze so could be dramatic if it went in that direction.

cstr vol skew

Graphs courtesy of Livevol