Call Traders Blast Delta Air Lines Stock Before Earnings

DAL has added more than 27% in the last six months

Digital Content Manager
Jan 9, 2023 at 1:20 PM
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We're not even two weeks into 2023 and the earnings docket is already heating up. Delta Air Lines, Inc. (NYSE:DAL) reports fourth quarter earnings before the open on Friday, Jan. 13, and the stock is looking to stay hot to start the new year.

The airline stock seems to be enjoying broader market tailwinds today, last seen up 3.3% at $37.23. Despite a 10% year-over-year deficit, the shares are pacing for their fourth-straight win and highest close since June 8. In the past six months, Delta Air Lines stock has added a healthy 27.3%.

DAL Intraday

The stock's history of post-earnings reactions is a mixed bag, with DAL finishing its eight next-day sessions higher as many times as it finished lower, though in April the stock saw a 6.8% jump. In the past two years, the shares averaged a move of 3.7%, regardless of direction. This time, the options pits are pricing in a larger-than-usual swing of 7.3%.

Options bulls are chiming in ahead of earnings, with 48,000 calls exchanged so far today, which is triple the intraday average volume. The most popular contract is the January 2023 40-strike call.

This may be the beginning of a shift in sentiment, given then the security's Schaeffer's put/call open interest ratio (SOIR) ranks higher than just 85% of readings from the last year. In other words, short-term options traders have rarely been more bearish on DAL.

It's also worth noting Delta Air Lines stock boasts attractively priced premiums at the moment. This per its Schaeffer's Volatility Index (SVI) of 39%, which stands in the low 8th percentile of readings from the past year.

 

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