RAD Reeling Despite Upbeat Quarterly Report

Call volume is taking off in the options pits today

Deputy Editor
Sep 24, 2020 at 10:41 AM
facebook twitter linkedin

The shares of Rite Aid Corporation (NYSE:RAD) are down 15.6% at $11.26 at last check, brushing off the company's second-quarter earnings and revenue beat as well as upbeat sales sentiment moving into the next quarter. The retail pharmacy noted that quarterly front-end same store sales, excluding cigarette and tobacco products, rose 6.1%. Meanwhile, Rite Aid announced that it plans to expand its COVID-19 testing, which has surpassed 300 sites. 

On the charts, RAD's recent rally was yesterday rejected by the 100-day moving average. Now gapping lower, the stock has been pushed below its 320-day moving average, which it hasn't closed beneath since mid-March. Year-to-date, the stock is down 29.1%.

The three analysts in coverage sport a tepid "hold" rating on RAD. There is plenty of room for price-target hikes as well, considering the 12-month consensus price target of $10.17 is around an 8% discount to current levels, after today's dramatic fall. 

Calls have outweighed puts in the options pits. This is per RAD's 50-day call/put volume ratio of 4.59 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than 78% of readings from the past year, meaning long calls are being picked up at a faster-than-usual rate.  

Today, call volume is surging, with 11,000 calls across the tape already -- eight times what's typically seen at this point. Most popular is the weekly 10/2 14-strike call, meaning plenty of traders are betting on more upside for RAD by the end of next week. 


Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 



Special Offers from Schaeffer's Trading Partners