To The Moon

PayPal Sees Bullish Options Support, Circle Capped Ahead of Earnings

Ahead of earnings, $PayPal(PYPL)$   and $Circle Internet Corp.(CRCL)$   saw large-scale new-position options activity. Based on the trade structures, options flows are bullish on PayPal and bearish on Circle. Specifically, PayPal traders are expressing a bullish view by selling puts to bet that the stock will hold key support, while CRCL traders are selling calls to cap upside, signaling limited confidence in a rebound.

PayPal: Selling puts to bet on a “no-blowup” earnings outcome

PayPal is scheduled to report earnings before the market opens on February 3. In the run-up to the release, its options market showed a clear bullish bias. On February 2, institutions simultaneously sold the February 2026 $50 puts and bought the May 2026 $40 puts, with both legs trading 22,350 contracts. The total notional options size exceeded $4.2 million. The short $50 put alone generated approximately $2.82 million in premium, with a V/OI ratio of 55.04, indicating the position was overwhelmingly new opening interest. The bullish credit spread collected roughly $1.43 million in net premium. The logic is straightforward: as long as PayPal does not fall below $50 after earnings, the position is profitable. This structure reflects institutional expectations of limited downside risk and post-earnings volatility compression. 

From a fundamental perspective, entering 2026 PayPal's core payments and merchant services remain stable, profitability is relatively predictable, and with valuation already compressed, selling high implied-volatility puts offers a more attractive risk-reward than outright directional longs.

Circle: Selling calls to cap upside, betting the crypto cycle remains in a downturn

By contrast, CRCL's options activity delivers a much clearer bearish signal. The stock has fallen from nearly $300 at last year's peak to below $60, a drawdown of more than 80%, reflecting not only company-specific pressures but a broader downturn in crypto assets. Over the past week, Bitcoin has sold off sharply amid deleveraging and capital rotation away from high-volatility assets, cooling trading activity and risk appetite across the crypto market. As on-chain volumes, DeFi activity, and speculative demand retreat, usage and revenue-linked dynamics for stablecoins such as USDC come under pressure, materially reducing Circle's earnings leverage in a down cycle.

Against this backdrop, traders on the February 27, 2026 expiration sold 4,900 contracts of the $70 calls while buying two separate blocks of 1,230 contracts each of the $64 calls, forming a call-spread structure centered on selling higher strikes, with a combined premium of approximately $2.93 million. The trade clearly bets that CRCL will struggle to reclaim the $70 level during the event window. Even if a rebound occurs, it is more likely to be a technical bounce rather than a structural reversal, with the February 11 lock-up expiration and the February 25 pre-market earnings release reinforcing a “sell-into-rallies” mindset and incentivizing traders to monetize elevated implied volatility through call selling.

Summary

Overall, the signal from the options market is clear: PayPal represents a defensive bullish setup, while Circle is a cyclical bearish trade. For investors, PayPal increasingly trades like a mature payments company with stable earnings dynamics, making the $50 support level the key area to monitor around earnings. In contrast, CRCL remains highly sensitive to crypto market sentiment and capital flows. Until Bitcoin and the broader crypto market show signs of a sustained stabilization, any rebound in CRCL is more likely to face meaningful upside resistance rather than evolve into a durable recovery.

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