Ruby Tuesday, Inc. (RT) Puts Pop After Earnings Disaster

Ruby Tuesday, Inc. (RT) put options are hot, as the stock sits on the short-sale restricted list, following last night's earnings report

by Celeste Taylor

Published on Oct 7, 2016 at 12:01 PM
Updated on Jun 24, 2020 at 10:16 AM

Restaurant stock Ruby Tuesday, Inc. (NYSE:RT) released its fiscal first-quarter earnings last night, posting an adjusted loss of 11 cents per share. RT's net loss widened after closing roughly 100 locations, while same-store sales fell 2.7%. In addition, the company said it will no longer offer fiscal guidance in order to focus on longer-term goals. Although RT's option pits typically see a low absolute volume, puts are taking off on a relative basis, trading at 16 times their usual intraday rate and in the 99th percentile of their annual range.

Meanwhile, RT's stock volume is on track to hit a new annual high, even as it sits on the short-sale restricted (SSR) list due to a post-earnings plunge. Today's selloff is likely a cause for celebration among short sellers, with short interest on RT up more than 19% over the last two reporting periods, and now accounting for 5.4% of its float. At the stock's average daily volumes, it would take roughly one week to buy back these bearish positions.

Drilling down into the technicals, Ruby Tuesday, Inc. (NYSE:RT) is down 13.4% at $2.17, after being halted earlier. Year-over-year, RT -- like several other food-industry stocks -- has struggled, with the shares down 67% over that time frame. What's more, the shares have been ushered lower by their 20-day moving average for the past few months, and earlier touched a seven-year low of $2.08.

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