AIG Options Market Prices in 3.8% Post-Earnings Stock Move

The options market is pricing in a potential 3.8% swing for American International Group Inc. (AIG) shares following the company's upcoming earnings announcement, according to data compiled by Bloomberg. The insurance giant is scheduled to report its financial results after the market closes on November 3.

This implied move, derived from the pricing of AIG options contracts, serves as a market-based forecast for the stock's potential volatility. It reflects traders' expectations for how much the share price could move, in either direction, in the trading session after the earnings release.

Historical Performance vs. Expectations

An analysis of AIG's stock performance over the past eight earnings announcements reveals that the actual price move has been more dramatic than the options market predicted in two instances. In the other six periods, the stock's move was within the implied range.

Key instances where the actual move surpassed the implied move include:

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• February 10: Shares surged 6.1%, significantly outpacing the implied move of 3.7%.
• February 11, 2025: The stock climbed 5.1% versus a much smaller anticipated move of 1.6%.

Context for Investors

For context, during its most recent earnings release on August 6, the options market implied a 3.9% move, while the stock actually declined by a more modest 1.8%. On April 30, the stock rose 3.6%, just under the 3.9% move priced in by options traders.

This historical data provides investors with a benchmark for AIG's potential post-earnings volatility. While the options market provides a quantitative estimate, past performance shows that earnings surprises can lead to price swings that exceed these expectations.