According to data from Yahoo Finance, one of the most active stocks last week was lodging and homestay marketplace Airbnb (NASDAQ:ABNB). On Friday, trading volume for ABNB stock reached 9.563 million, a huge lift from the three-month average volume of 5.92 million shares. Despite the boost in activity, the company hasn’t had the most auspicious start to 2025.
Since the beginning of the year, ABNB stock has declined about 2%. In contrast, the benchmark S&P 500 — which isn’t exactly lighting the arena on fire — is up half-a-percent during the same period. Still, circumstances may be improving, with the security gaining 3% in the trailing month.
On a fundamental note, broader economic challenges — particularly elevated costs compared to the pre-pandemic era and uncertainties over international trade policies — have weighed on ABNB stock. At the same time, these headwinds could be diminishing in strength.
Primarily, the Trump administration has shown a willingness to listen to reason despite aggressive rhetoric. Indeed, Wall Street has an acronym for the phenomenon: TACO or Trump always chickens out. While crude, the overall message is that Trump often acts like the boy who cried wolf.
Essentially, the market is pricing in the tariff tantrums with the underlying assumption that the president will eventually come around to taking the sensible course of action. If so, investors may not need to worry as much about recessionary fears. In turn, improved sentiments may bode well for ABNB stock.
Still, an even more compelling signal is helping the cause for Airbnb bulls: quantitative indicators suggest that a broader turnaround may be just around the corner.
From an investment point of view, the focus tends to center on the “why” of the target enterprise or asset. Market participants want a sensible, narrative-driven justification for risking their capital. But when it comes to trading — especially options trading — the focus is on the how: how much, how fast and most importantly, how likely.
Stated differently, the driving force behind options trading is probabilities. Sure, the surrounding narrative provides context but at the end of the day, traders are concerned about the likelihood of their wagers being profitable.
As such, all options strategies start with a basic understanding of the probabilistic landscape of the target asset. In the case of ABNB stock, the chance that a long position will be profitable on any given week is only 52.36%. This figure is calculated functionally by a rise-over-run-style equation: take the number of positive weeks divided by the total number of weeks in the dataset.
As a baseline, ABNB stock features long-side odds that are only marginally better than a coin toss. However, it would be inaccurate to assume that the odds are 52% across all sentiment regimes. Certain cycles feature probabilities that may differ dramatically from the baseline.
Significantly, in the past two months, ABNB stock printed a “6-4-D” sequence: six up weeks, four down weeks, with a net negative trajectory across the 10-week period. What’s important here is that in 69.23% of cases, the following week’s price action results in upside, with a median return of 6.4%.
On Friday, ABNB stock closed at $129. Should the implications of the 6-4-D pan out as projected, ABNB could reach $137.26 within a week or two. Over the next several weeks, the bulls may push toward the $140 mark due to its technical and psychological significance.
Further, what makes the above setup so alluring is that the market breadth sequence adds nearly 17 percentage points of free odds in favor of the bullish speculator. Therefore, traders are incentivized to consider a debit-based approach.
Those interested in playing the numbers game may want to look at the 133/137 bull call spread expiring June 20. This transaction involves buying the $133 call and simultaneously selling the $137 call, for a net debit paid of $137. Should ABNB stock rise through the short strike price at expiration, the maximum reward is $263, a payout of nearly 192%.
Primarily, this trading idea is attractive because the 6-4-D sequence calls for ABNB stock to rise above $137 in a relatively quick amount of time. Subsequently, the June 20 expiration date provides about three weeks of trading activity for this target to be reached.
