Delta Stock Grounded Amid Suffering Airline Sector

Delta's bookings have fallen by over 30%

Assistant Editor
Mar 18, 2020 at 12:19 PM
facebook twitter linkedin


Near the bottom of the New York Stock Exchange (NYSE) today are the shares of Delta Air Lines, Inc (NYSE:DAL), down 24.1% to trade at $24.10 at last check. The airline stock continues to struggle amid the spreading coronavirus and travel fears associated with the pandemic. Delta recently announced its bookings have fallen by more than 30% while its workers are requesting voluntary unpaid leave in April. Additionally, the airliner will cut domestic and international capacity considerably until the pandemic is under control.

Delta stock is on track for its fourth straight loss, and earlier hit a seven-year low of $23.60. Up until late February, DAL was consolidating below the $60 level, but the panic-induced broad market selling saw the security take a drastic tumble to the tune of a 58.4% year-to-date loss, ushered lower by its 10-day moving average.

Analysts are solidly divided on Delta stock. Of the 10 reporting firms, six sport a “buy” position or better, while the remaining four recommend a “hold” position and currently no recommendations to “sell.” These positions mirror the security’s current consensus 12-month price target of $58.47 which sits at a whopping 141% premium to the stock’s current level. In other words, a slew of bear notes could pressure DAL lower.

In the options pits, puts are favored. The equity shows a Schaeffer's put/call open interest ratio (SOIR) of 1.49, ranking in the elevated 97th percentile. In other words, short-term options players have rarely been more put-heavy during the last 12 months.

Echoing this, at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), DAL sports a 50-day put/call volume ratio of 0.95. This ratio ranks two percentage points from an annual high, so while calls have outpaced puts on an absolute basis, the rate of put buying relative to call buying has been accelerated.

Winning With Weekly Options

1606854690

  


 
Special Offers from Schaeffer's Trading Partners