Options Traders Target FedEx Stock Before Earnings

FedEx has a history of mixed post-earnings moves

Assistant Editor
Sep 21, 2021 at 2:09 PM
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The shares of FedEx Corporation (NYSE:FDX) are flat this afternoon, last seen down a paltry 0.05% at $250.73, hovering near seven-month lows just a few hours ahead of the company's fiscal first-quarter earnings, due out after the close today. Below, we will take a look at how the security has performed on the charts of late, and explore some of the options activity surrounding FDX ahead of the event.  

FedEx stock has worked its way lower on the charts since a May 27, record high of $319.90. The 20-day moving average has put pressure on the shares since an early July bear gap, and, more recently, the stock has broken below the long-supportive 320-day trendline. With three-straight monthly losses under its belt, FDX sports a 3.5% year-to-date deficit.

FDX Chart September 21

Options activity is ramping up ahead of the event. So far today, 33,000 calls and 17,000 puts have exchanged hands, which is double what's typically seen at this point. The most popular by far is the October 270 call, where new positions are being opened, followed by the weekly 9/24 260-strike call. This indicates these traders see plenty of upside for FedEx stock by the time these options expire.  

Lastly, a look at the equity's history of post-earnings reactions over the past two years shows a mixed response. During its last eight reports, half of these next-day sessions were higher, including an 6.1% pop back in March. The security averaged a post-earnings swing of 7.6% the last eight quarters, regardless of direction. This time around, the options market is pricing in a smaller-than-usual move of 6.5%. 

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