* First-week options straddles gain average 23%, ORATS data

shows

* Comparable first-week strategy posted average 2% loss over

previous 12 quarters, ORATS says

* Fourth-week straddles lost average 6% versus historical

average 5% loss, ORATS says

By Saqib Iqbal Ahmed

NEW YORK, Aug 11 (Reuters) - Larger-than-usual post-earnings

stock swings by AI and hyperscaler companies this earnings

season have upended a historical pattern in which smaller

companies' results typically drive the larger stock moves, data

from options analytics service ORATS showed.

The first few weeks of earnings seasons are typically

dominated by major market leaders, including financial giants

like JPMorgan Chase and Wells Fargo, early-reporting Dow Jones

blue chips, and mega-cap tech powerhouses like Apple, Microsoft,

Alphabet, and Meta. Smaller companies in the index take center

stage in later weeks.

Thinner liquidity, smaller floats, less institutional

ownership and sparser analyst coverage relative to larger

companies combine to make small-cap earnings reactions typically

larger in magnitude than those of mega-caps.

Not so this time.

"The smaller companies in recent weeks have had more muted

earnings moves - a contrast to the early weeks when AI and

hyperscalers' reports helped drive larger-than-usual moves,"

ORATS founder Matt Amberson said.

Some of the largest hyperscalers, including Amazon,

Microsoft, Google and Meta, have produced big post-earnings

stock swings, surpassing their respective average moves in past

quarters, as investors aggressively cheered or sold off shares

depending on whether AI capital expenditures appeared to be

paying off.

For companies reporting in the first week of the

second-quarter earnings season, which kicked off in mid-July,

buying options straddles - a strategy combining the purchase of

a put and a call - fetched the largest average gains, with

profits shrinking in weeks two through four, ORATS data showed.

Week one gains averaged 23%, compared with an average loss

of 2% for the strategy in the first week of earnings over the

last 12 quarters, the ORATS analysis showed. In contrast, for

the fourth week of results, the strategy produced an average

loss of 6% compared with the historical average of a loss of 5%.