Discover Financial Stock Gets Slammed by Instinet

Near-term open interest looks unusually put-heavy on Discover Financial stock

by Emma Duncan

Published on Dec 5, 2019 at 10:18 AM

Discover Bank parent Discover Financial Services (NYSE:DFS) is down 1.3% to trade at $82.76 this morning. Weighing on the equity is a fresh downgrade to "neutral" from "buy" and price-target cut to $89 from $96 out of Instinet. The analyst in coverage is pessimistic about the company's upcoming earnings growth. DFS is now pulling back to recent support of its 80-day moving average, but remains 41% higher year-to-date. 

Digging a little deeper, near-term open interest looks unusually put-heavy on Discover Financial stock. This is according to the Schaeffer's put/call open interest ratio (SOIR) of 1.28, which ranks just 1 percentage point from an annual high.

Lastly, DFS' Schaeffer's Volatility Scorecard (SVS) comes in at 95 out of 100. In other words, this means the security has consistently made bigger moves on the charts than its options premiums have priced in over the past 12 months.

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