DPZ Stock Nears Fresh Highs Ahead of Earnings

Options bulls have been swarming DPZ ahead of the event

Deputy Editor
Feb 18, 2020 at 3:07 PM
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Restaurant name Domino's Pizza, Inc. (NYSE:DPZ) has been on a tear in recent weeks. Since staging a sharp bounce off its 100-day moving average in early February, the equity has added almost 10%. Today, the stock is climbing even higher, up 1.1% to trade at $294.80, on pace for its fifth straight win and just within striking distance of its April 24 annual closing high of $296.65. This push higher comes just ahead of DPZ's fourth-quarter earnings report, which is due out before the bell on Thursday, Feb. 20.

Daily DPZ with 100MA

Looking back at Domino's Pizza's last eight earnings reports, next-day returns have been mixed, with DPZ dropping 8.7% in the session following its July earnings report, but adding 7.3% after its April 2018 quarterly confessional. This time around the options pits are pricing in a 9% swing, which is slightly higher than the post-earnings move of 5.2% averaged over the past two years, regardless of direction. 

Speaking of, DPZ's options pits are bursting with activity today. So far, 4,140 calls and 2,332 puts have crossed the tape, three times the intraday average. The March 290 and 300 calls are the most popular, while the February 270-strike is the most active on the put side. 

This bullish bias is nothing new, however. In the last 10 days, 2.87 calls have been bought for every put at the  International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits higher at 96% of all other readings from the past year, suggesting a much bigger-than-usual appetite for long calls of late. 

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