AeroVironment options traders position for post-earnings drop ahead of Sep 9 report

As of 2:38 PM EDT on September 8, AeroVironment (AVAV) shares traded at $149.40, up 3.28%, while total options volume reached 11,456 contracts. Traders have placed a distinctive pre-earnings bet, with the chosen strikes signaling a bearish stance: both primary structures involve put options that expire just two days after the upcoming earnings release.

The Earnings Backdrop

AeroVironment is scheduled to report earnings on Wednesday, September 9, after the market close, with the options positions below expiring on September 11—a roughly 48-hour post-earnings window. Options pricing suggests an implied move of about 13% in either direction, and AVAV has surpassed that implied move in two of its last eight reports, including a 25.9% surge in June 2025.

Structure #1 — The Tight Bear Spread

A $150/$142 put spread with 1,160 contracts (580 on each leg) expiring September 11:

The $150 put is already slightly in-the-money, given the stock's current price of $149.40.

Maximum profit would be realized if AVAV closes below $142 on Friday, representing roughly a 4.9% decline from current levels.

This structure offers a low-cost, defined-risk hedge, likely intended to protect a long position or to reflect a modest expectation of a post-earnings pullback.

Open interest on both legs remains low (22 and 206), indicating that this is newly established positioning rather than a roll of an existing trade.

Structure #2 — The Surgical Butterfly

A $140/$130/$120 put butterfly with 800 contracts (200/400/200 across strikes), expiring September 11:

Maximum profit is centered at $130, which corresponds to a roughly 13% drop from the current price.

The 13% target appears intentional, as it aligns precisely with the implied earnings move derived from options pricing.

Butterflies are precision tools; this position suggests the trader holds a specific downside target rather than a general bearish view.

With limited cost and convex payoff, the structure functions as a lottery ticket on a significant earnings miss.

Volatility Signals

Three-month implied volatility declined by 1.06 percentage points to 71.89%. While volatility remains elevated, the easing is consistent with pre-earnings volatility selling by market makers.

The 90/110 skew stands at -1.66 percentage points, down 1.15 points. Negative skew indicates that out-of-the-money calls have higher implied volatility than out-of-the-money puts, suggesting the broader options market continues to price greater upside tail risk than downside—despite the bearish nature of these specific put structures.

The divergence between the negative skew’s bullish bias and the put-heavy positioning stands out as the most notable signal, reflecting two opposing views on the same stock.

The Fundamental Tailwind to Fade?

The bullish narrative is compelling, anchored by a landmark $465 million U.S. Army laser contract announced on September 2—the first-ever production award for directed energy weapons in American history—alongside a NASA Mars helicopter contract from August and a $51 million order for Switchblade 600 munitions. Stifel maintains a Buy rating with a $220 price target, implying roughly 47% upside from current levels.

Put buyers seem to wager that the stock’s 3.28% pre-earnings advance has overshot fundamentals, or that upcoming earnings results will fail to meet the high expectations embedded in options pricing.

Quick Snapshot

Snapshot: AeroVironment trades at $149.40, up 3.28% (as of Sep. 8, 2:38 PM EDT); total options volume is 11,456 contracts, with a call/put ratio of 1.08x, 3-month implied volatility at 71.89%, and an implied earnings move of ±13%.

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