Options Traders Blast Levi Strauss Stock Before Earnings

LEVI has a history of upbeat post-earnings returns

Deputy Editor
Oct 6, 2022 at 1:15 PM
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Levi Strauss & Co. (NYSE:LEVI) is seeing a surge in options activity ahead of its third-quarter earnings report, which is due out after today's close. Halfway through the session, LEVI's normally quiet options pits have seen 5,071 puts and 2,446 calls exchanged, or five times the intraday average volume. The most activity is taking place at the November 14 put, where new positions are being sold to open. Ahead of the event, the equity is trading 3.5% lower at $16.01.

These traders are pricing in a 10.5% swing for Levi Strauss stock for tomorrow's session, regardless of direction. That's more than double the average post-earnings move of 4.2% the equity saw in its last eight quarters. LEVI has an overwhelmingly positive post-earnings history, with six of its last eight reports resulting in positive returns. 

A broader look at the options pits shows a preference for bearish bets. In fact, the equity's 10-day put/call volume ratio of 1.33 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 93rd percentile of its annual range, indicating an elevated rate of put buying.

Analysts, meanwhile, are settled firmly in the bullish camp, with seven of eight in coverage recommending a "strong buy." It's also worth noting that short interest jumped 30.4% in the last month, and now makes up 9.8% of the stock's available float. It would take more than four days to buy back these bearish bets, at Levi Strauss stock's average daily pace of trading. 

The shares have been chopping lower since their November 2021 peak, with the 60-day moving average guiding LEVI to its now 34.4% year-over-year deficit. The stock is attempting to rebound off its Oct. 3, two-year low of $14.42, though the 20-day moving average has also moved in as resistance on the charts.

levi oct 6

 

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