Options Traders Eye Fastenal Stock Ahead of Earnings

FAST stock gapped lower after its last earnings report

Managing Editor
Jul 11, 2017 at 1:47 PM
facebook twitter linkedin

Industrial machinery specialist Fastenal Company (NASDAQ:FAST) is set to report second-quarter earnings tomorrow, and investors are keeping their eye trained on the construction name, which has an underwhelming history in the earnings spotlight. In addition, FAST stock received a price-target cut from Wells Fargo today, to $47 from $51. Below, we will take a look at Fastenal stock's performance on the charts, and how FAST options traders are speculating ahead of tomorrow's earnings release. 

Fastenal shares are currently down 0.8% to trade at $43.53, and have endured a rough stretch the last few months. Since shooting to a three-year high of $52.74 on April 5, the stock has dropped 13%, primarily due to a post-earnings bear gap in mid-April. Fastenal has notoriously underperformed the day after reporting earnings, undergoing a drop in the subsequent session seven out of the last eight times. However, from a longer-term perspective, FAST stock has been in a channel of higher lows and highs since 2015.


Digging into the options pits, FAST options volume is currently running at nine times the average intraday clip, with roughly 7,300 puts and 2,600 calls exchanged. In fact, Fastenal put volume is on pace for an annual high. Unsurprisingly, FAST's 30-day at-the-money implied volatility hit a 52-week peak earlier, as volatility expectations mount ahead of the earnings release tomorrow.

Short sellers are gearing up for another post-earnings slide for FAST stock. Short interest jumped 9.5% in the most recent reporting period, and now accounts for nearly seven sessions' worth of pent-up buying demand, at Fastenal shares' average daily trading volume.


If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

Schaeffer's Investment Research Master Portfolio Trial


Special Offers from Schaeffer's Trading Partners