Starbucks Stock Hot as U.S. Stores Look to Open Back Up

90% of Starbucks U.S. stores are set to be open by early June

Deputy Editor
May 5, 2020 at 10:03 AM
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After Starbucks Corporation (NASDAQ:SBUX) reported last week earnings that fell short of Wall Street's expectationsthe company announced last night it expects 90% of company-owned stores in the U.S. to be open by early June, with 85% to be opened by the end of this week. As a result, the shares of Starbucks are up 3.5%, last seen trading at $74.37.

On the charts, after Starbucks stock was turned away by its 80-day moving average last week post-earnings, but that pullback was contained by their 30-day moving average yesterday. SBUX is now up 12.7% on the quarter, but still down 18.2% year-to-date.

Among options traders, the equity's Schaeffer's put/call open interest ratio (SOIR) of 1.41, which sits higher than 90% of all other readings from the past year, suggesting short-term options players have rarely been more put-biased in the last 12 months.

Today though, SBUX is experiencing plenty of call activity in the options pits already. At last check, over 8,500 calls have crossed the tape, double the number of puts traded and volume pacing for the 94th percentile of its annual range. The most popular contract today is the weekly 5/8 75-strike call, where new positions are being opened. Buyers of these calls are expecting the coffee chain to keep climbing by next Friday, when the options expire.

Lastly, SBUX's Schaeffer's Volatility Scorecard (SVS) sits at up at 91 (out of 100.) This indicates that the security has tended to exceed options trader's volatility expectations during the past year. 

 

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