U.S. stock futures are treading water in positive territory this morning. Wall Street is holding its ground in pre-market trading due to strong earnings results from Amazon (NASDAQ:AMZN).

However, there is a tinge of nervousness. Traders are awaiting the release of second-quarter gross domestic product (GDP). Economists have forecast a reading of 4.2%, which would be the fastest growth rate since 2014.

Against this backdrop, futures on the Dow Jones Industrial Average are up 0.07%. Meanwhile, S&P 500 futures have added 0.02% with Nasdaq-100 futures up 0.12%.

In options activity, volume remained brisk on Thursday. Overall, about 21.4 million calls and 15.8 million puts changed hands on the session. Over on the CBOE, the single-session equity put/call volume ratio rose to 0.63. The 10-day moving average held pat at 0.62.

Options traders took aim at the social media sector yesterday following dismal reports from both Facebook (NASDAQ:FB) and Twitter (NYSE:TWTR). Ford (NYSE:F) was also a target after lowering its 2018 guidance.

Let’s take a closer look:

Facebook (FB)

In what was likely the largest single-day loss of market capitalization ever, FB stock plunged 19.6% on the open yesterday. Specifically, Facebook lost $123.4 billion in value over night.

The driver?

Facebook reported earnings after the close on Wednesday, with both revenue growth and daily active users coming up short. Specifically, Facebook said revenue rose to $13.23 billion, compared to analyst targets for $13.36 billion. Global daily active users came in at 1.47 billion, shy of Wall Street’s projections for 1.49 billion.

However, it was the company’s conference call with shareholders that caused the most damage. Facebook warned that user growth was slowing, that revenue growth was decelerating and that margins were tightening.

Options traders flooded the stock following FB’s dive. Volume soared to 1.7 million contracts, or about 7.3 times Facebook’s daily average. Calls managed to claim 59% of the day’s take, but many of these were likely closeouts ahead of today’s expiration.

Focusing on August options, however, reveals hopes for a rebound from yesterday’s losses. The August put/call open interest ratio currently rests at 0.67, with bullish calls firmly in control. Traders will want to keep a close eye on this reading going forward as a sign of short-term shifts in sentiment after earnings.

Twitter (TWTR)

Twitter stock lost nearly 3% in the Facebook social media vortex yesterday. Unfortunately for TWTR shareholders, Twitter offered up its own disappointing outlook after the close last night, reporting a one-million drop in monthly users during the second quarter. Twitter said that figure would increase as it fights spam and fake accounts, which gave rise to growth concerns from investors.

TWTR options traders were on edge following Facebook’s report, but call contracts remained the most popular during yesterday’s trading. Volume rose to 227,000 contracts, with calls claiming 64% of the day’s take.

August options were pretty bullish heading into the report. The put/call OI ratio for the series comes in at 0.68, with calls on the verge of doubling puts. I would expect this ratio to rise today, as TWTR stock options traders bet on a rebound from the plunge.

Ford (F)

Ford Motor was smacked by the tariff bug during the second quarter. The U.S. automaker missed on all three fronts, with earnings, revenue and guidance all coming up short. Ford blamed rising raw-materials costs, unfavorable foreign-exchange rates and softer sales in China for the short fall — all factors that can be traced back to Trump’s tariffs.

Digging into the numbers, Ford posted earnings of 27-cents-per-share on sales of $38.9 billion in the quarter. Analysts were expecting earnings of 31-cents-a-share on sales of $39.2 billion. Ford also lowered its 2018 earnings outlook to $1.30 – $1.50-per-share, compared to analyst expectations for $1.51-per-share.

Options traders once again appeared hopeful of a rebound. Volume jumped to 180,000 contracts, or nearly triple Ford’s daily average. Calls claimed 61% of the day’s take, hinting at a bullish bias despite F stock’s nearly 6% plunge.

Looking ahead, the situation isn’t quite as rosy. Currently, the August put/call OI ratio rests at 0.79, with puts nearing parity with call options in the series. Yesterday’s poor quarterly report may give these bears more confidence, and send this ratio low. Traders will want to keep an eye on support/resistance at $10 for confirmation of this bearish outlook.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.

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