Fastenal Stock Options Pop Before Earnings

FAST is due to report earnings first thing tomorrow morning

Managing Editor
Jan 16, 2020 at 12:55 PM
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Joining the busy earnings slate this week is distribution name Fastenal Company (NASDAQ:FAST). The company is scheduled to report earnings before the open tomorrow, Jan. 17. Below we will take a look at how FAST has been faring on the charts, and what the options market is pricing in for post-earnings moves. At last check, the equity is up 0.6% at $37.01.

On the charts, Fastenal stock has been maintaining momentum gained after a mid-October earnings-induced bull gap. The ascending 70-day moving average has since been a solid floor of support for the shares, too, leading FAST to its now 36% year-over-year gain.

Daily FAST with 70MA

Digging into Fastenal's earnings history, the stock has closed higher the day after reporting 50% of the time during the past eight quarters. During this time frame, FAST has averaged a 7.5% swing, regardless of direction. This time around, the options market is estimating the same, 7.5% post-earnings move, per the stock's near-term straddle indication.

In the options pits, call traders have been surrounding the shares. That is per the stock's 50-day call/put volume ratio of 2.07 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks in the 94th percentile of its annual range. Today, options volume is running at five times the expected rate on FAST, with the January 2021 38.75-strike call most popular.

Short interest dropped 5.9% during the past two reporting periods, and now accounts for 5% of the stock's available float. At the equity's average pace of daily trading, it would take shorts almost seven days to buy back their bearish bets.


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