Apple and Amazon report after the bell. Here's what the options market is saying

Apple and Amazon report earnings after the close tonight, and the options market is pricing in very different outcomes for the two megacaps. The S&P 500 has had a rough week, so a pair of strong prints could steady the ship. But getting two big-tech winners on the same night has been rare this season. Alphabet and Tesla fell together last week. Microsoft rallied Wednesday while Meta slumped. Options flows suggest the same split may play out again.

Apple is up 25% year to date, hitting records and rallying 7% since the S&P 500 peaked on June 2. Options traders expect a bigger-than-usual move after the report. Implied volatility points to a 3.4% swing, more than double the stock's median 1.5% move after its past four quarterly reports, according to Cboe LiveVol data.

But the options flow turned bearish this week. Early in the week, traders leaned bullish. That changed as the broader market sold off Wednesday. More than $470 million of the $634 million in options premium on Apple Wednesday was tied to calls, but much of that was calls sold, not bought. Net trade sentiment in the options was slightly negative, according to data from SpotGamma and Barchart. The most popular contract expiring Friday by volume Wednesday was the 330-strike put, which needs a drop of more than 3% to pay off.

Amazon is flat on the year, and traders look a bit more optimistic. Of the $615 million in options premium Wednesday, most was tied to puts. But traders seemed more likely to sell that volatility than buy it. Net trade sentiment was positive by almost $3 million and 100,000 deltas, Barchart analysis shows. The expected move after earnings is 6.6%, compared to the median 7% over the past four quarters, Cboe LiveVol data shows.

A clean sweep of beats from both companies could lift the market into the weekend. A repeat of the split outcomes would leave the S&P 500 stuck in its weekly rut. The options market is betting on the latter.