META and CHWY See Surge in Bearish Options Bets
Meta Platforms posted a 2.46 put-to-call ratio while Chewy saw 3:1 put activity ahead of Wednesday earnings. Options traders are positioning defensively.
Unusual options activity flared in Meta Platforms and Chewy on Monday, with both names showing heavy put volume that suggests traders are bracing for downside.
Meta's put-to-call ratio hit 2.46, indicating investors were buying nearly 2.5 puts for every call. That's an unusually bearish skew for a mega-cap tech stock. Chewy showed an even more lopsided 3:1 put-to-call ratio ahead of its fiscal Q1 earnings report scheduled for Wednesday.
META: March Expiration Drives Volume
The put activity in Meta was concentrated in the monthly March contract with just one day remaining. Barchart's Options Flow data showed block prints valued at $243 million and $146 million on transactions of 57,000 and 30,000 contracts respectively.
That's institutional-scale positioning. Someone with deep pockets is either hedging a large long position or making a directional bet against the stock.
The context matters. The S&P 500 broke below its 200-day moving average for the first time since March 2025 when tariff fears roiled markets. The VIX closed at 26.78 on Friday, up 25% from Wednesday's lows. When volatility spikes, options premiums inflate and hedging activity increases.
Meta has been relatively resilient through the recent selloff, but the stock isn't immune to broader market stress. Tech names with high international exposure face particular uncertainty given the Iran conflict's impact on global growth expectations.
CHWY: Earnings Risk
Chewy's options activity has a clearer catalyst. The pet e-commerce company reports Q1 results Wednesday, and the put volume suggests traders expect a rough print.
Large blocks hit the March 27th $22 strike puts, with volume of 13,717 versus open interest of just 1,291. That's new positioning, not existing holders rolling or adjusting. The transactions were bought between $0.08 and $0.10 each.
The setup is interesting. Chewy shares are down 4.3% over the past month and trading around $23.65, well below the average analyst target of $43.82. The market expects revenue to be flat year-over-year, a deceleration from the 14.9% growth in the same quarter last year.
Options pricing implies a roughly 10% move in either direction post-earnings. The put buyers are betting the move is lower.
What to Watch
For Meta, the key question is whether Monday's activity was a one-day hedging event tied to March expiration or a signal of sustained bearish sentiment. If put volume normalizes, the flow was likely mechanical. If it persists, something bigger may be building.
For Chewy, Wednesday's report will resolve the uncertainty. The company beat revenue estimates last quarter with $3.12 billion in sales, up 8.3% year-over-year. But expectations have shifted. The pet boom that lifted Chewy during the pandemic has faded, and competition from Amazon and Walmart's pet offerings has intensified.
The options market is sending a clear message: caution. Whether that caution proves warranted depends on what happens next.