C3.ai Options Volume Surges as Traders Position for Earnings Volatility

Options trading volume in C3.ai (NYSE: AI) surged Monday ahead of the company's scheduled earnings release on September 2, with traders positioning for a significant post-announcement move. The activity was heavily skewed toward bullish bets, though the structure of the most popular trades indicates an expectation of contained upside rather than an explosive rally.

A Closer Look at the Activity

Total options volume reached 150,258 contracts, with call options dominating the session, according to Investing.com data. Key figures from the trading day include:

• Call Volume: 147,213 contracts, the highest level recorded since February 2026.
• Put Volume: Just 3,045 contracts, resulting in a call-to-put ratio of nearly 50-to-1.
• Dominant Trades: The most active positions were not simple call purchases but complex spreads. One trade involved 81,200 contracts in a call condor using the $10, $10.50, $11, and $11.50 strikes. Another large trade was a 40,638 contract vertical call spread using the $10.50 and $11 strikes.

These strategies are often used by traders who expect an increase in volatility but want to define their risk and potential profit. A call condor profits if the underlying stock makes a notable move but stays within a specific price range by expiration.

What It Means for Investors

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The prevalence of call spreads and condors suggests that while traders are betting on an upward move, they are also capping their potential gains. This is a common strategy ahead of earnings, when elevated implied volatility makes outright call options expensive. By selling a further out-of-the-money call, traders can reduce the cost of their bullish bet.

The data also showed that 3-month implied volatility, while still high at 73.26%, has begun to decline slightly. The low volume of put options suggests the market is not heavily hedged for a negative earnings surprise, creating a potential risk of a sharp downside move if the company's results disappoint.

Fundamental and Analyst Backdrop

C3.ai is scheduled to report an expected earnings per share (EPS) of -$0.25 on revenue of $52.3 million. The company faces a challenging fundamental picture, with analysts forecasting a revenue decline of 10.1% for fiscal year 2027 and no near-term profitability, as per Investing.com data.

The mean analyst price target for the stock stands at $8.82, which is below its recent trading price of $10.43. The significant options activity highlights that traders are focused more on the potential for short-term volatility around the earnings event than on the company's longer-term fundamentals.