Options Market Pricing In Big Moves From Opendoor Technologies, Upstart Holdings This Week

Zinger Key Points
  • The options market is pricing in big moves for Upstart Holdings and Opendoor Technologies.
  • Upstart shares are down 80.5% in the past 12 months, while Opendoor shares are up 88% in January.

Tech stock investors are bracing for some extreme volatility this week as a number of big names release fourth-quarter earnings in the coming days. However, the options market is also pricing in some major volatility for Upstart Holdings Inc UPST and Opendoor Technologies Inc OPEN even though neither company is reporting earnings this week.

Online Lender Rebound: Upstart Holdings is an online lending marketplace focused on personal loans. Rising interest rates have crushed Upstart and other online lenders and fintech stocks in the past year. Upstart shares are down 80.5% in the past 12 months, while shares of buy now, pay later provider Affirm Holdings Inc AFRM are down 74.6%, and shares of online lender LendingClub Corp LC are down 41.8%. Online lender SoFi Technologies Inc SOFI shares are also down 39.7% in the past year, but the stock rallied 12.6% on Monday after reporting record sales and profits in the fourth quarter and issuing positive guidance for 2023.

Related Link: Why The IPO Window For Fintech Is 'Essentially Closed' In 2022

While Upstart is not expected to report earnings until Feb. 14, online lenders may experience some high volatility this week in response to the Federal Reserve interest rate decision on Wednesday. The options market is pricing in a 10.8% move from Upstart this week.

Housing Stocks Heat Up: The rally in real estate platform Opendoor continued on Monday, and the options market expects another big move from the stock by the end of the week. Opendoor shares are up 88% in January, while competing platform Zillow Group Inc Z ZG is up 30.1% and Redfin Corp RDFN is up 66.7%. PulteGroup, Inc. PHM, Lennar Corp LEN and other homebuilder stocks are also off to a hot start in 2023 despite a softening U.S. housing market.

Related Link: Zillow Gets A Buy Rating: Leading Bank Expects Housing Market To Trough In 2023

Opendoor does not report earnings until Feb. 23, but traders should prepare for some more volatility this week. The options market is pricing in a 13.2% move from Opendoor shares this week.

Benzinga's Take: Traders always anticipate potential volatility in stocks tied to earnings reports, but traders who identify stocks like Opendoor and Upstart that may have less obvious volatility catalysts can avoid being blindsided by big unexpected swings in the market.

Now Read: How Aggressive Will The Fed Be This Week? Why Powell's Comments Are 'The Fulcrum Issue For The Markets'

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