AutoZone Stock Stalls Ahead of Earnings

Options volume is running at double the intraday average

Assistant Editor
Sep 20, 2021 at 1:27 PM
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Automotive retailer AutoZone, Inc. (NYSE:AZO) has shed 2.6% in the last 30 days, and has taken a breather since an Aug. 3 record high of $1,666.63. However, that pullback as contained by the shares' 80-day moving average. AZO was last seen down 0.2% to trade at $1,590.08, one day ahead of the company's fiscal fourth-quarter earnings report, which comes out before the open tomorrow, Sept. 21. 

AZO Chart 2 September 20

AutoZone's upcoming earnings has the normally-quiet options pits bustling with activity. The 707 puts traded so far today outpace the 505 calls that have exchanged hands, though both account for volume that is double the intraday average. The most popular is the weekly 9/24 1,420-strike put, followed by the 1,650-strike call, with positions being opened at both contracts.

This tendency toward puts has been the norm during the past 10 weeks. In fact, at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), AutoZone stock sports a 50-day put/call volume ratio of 2.35, which stands higher than 93% of readings from the past year.

A look at AutoZone's post-earnings history shows a mostly negative reaction. During its last eight reports, AZO was lower post-earnings five times. The stock averaged a two-year post-earnings return of 2.9%, regardless of direction. This time around, the options pits are pricing in a much bigger next-day swing for AutoZone stock at 6.1%. 

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