Lockheed Martin Stock Soars After Earnings, Revenue Beat

LMT options are now affordably priced after earnings

Deputy Editor
Jul 21, 2020 at 10:35 AM
facebook twitter linkedin


Lockheed Martin Corporation (NYSE:LMT) took a trip to the earnings confessional today, where the security company reported second-quarter earnings and revenue that topped Wall Street's estimates. Additionally, Lockheed Martin increased its 2020 full-year forecast. As a result, the shares of LMT are up 2.5%, last seen trading at $374.67.  

Out of the gate, today's rise put Lockheed Martin stock 10.3% down from its June 8, multi-month peak of $417.62. However, this is still well above the equity's mid-March, annual low of $266.11. LMT boasts a year-over-year gain of 2.4%, and is eyeing its sixth consecutive close above the 10-day moving average.

Meanwhile, the options pits are full of bullish activity. Lockheed Martin stock's 50-day call/put volume ratio of 2.95 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits in the elevated 90th percentile of its annual range. In other words, long calls are hot at the moment, and being ordered up at a quicker-than-usual clip. 

Today has proved more of the same, with calls trading at six times the average intraday amount and over double the number of puts exchanged so far. Most popular by far is the weekly 07/24 380-strike call, followed by the 385-strike call from the same series.

Analysts are optimistic as well, with six of eight brokers calling the stock a "strong buy." And now that earnings are over, a volatility crush means options are affordably marked. LMT's Schaeffer's Volatility Index (SVI) of 29% sits in the 17th percentiles of all other readings from the past year. This means options players are pricing in relatively low volatility expectations at the moment.
 

If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

Schaeffer's Investment Research Stock Pick Report
 


 


 
Special Offers from Schaeffer's Trading Partners