DGX Gains on Q3 Beat, Raised Guidance

Calls are taking off in the options pits

Assistant Editor
Oct 22, 2020 at 11:23 AM
facebook twitter linkedin

The shares of Quest Diagnostics Inc (NYSE:DGX) are up 2% at $125.32 at last check, after announcing third-quarter earnings and revenue above analyst expectations. Furthermore, the company raised its full-year guidance due the high demand for COVID-19 testing. To follow, Credit Suisse raised its price target to $135 from $130. 

Today's pop has DGX trading at its highest level since early August. Steadily climbing on the charts, the stock's early-October pullback was caught by the 150-day moving average. Now, the equity is on track for its fourth-straight weekly win, up 17.3% year-to-date. 

The brokerage bunch is looking bullish on the healthcare stock, with nine of the 14 analysts in coverage sporting a "buy" or better rating, while the remaining four linger at a tepid "hold," and not a "sell" in sight. 

The options pits are of similar sentiment, per DGX's 10-day call/put volume ratio of 13.64 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than 82% of readings from the past year, revealing a stronger-than-usual penchant for calls in the past two weeks. 

Today is more of the same, albeit with much higher volume after the positive news. So far, 1,886 calls have crossed the tape, which is six times what's typically seen at this point and pacing for the 98th percentile of its annual range. The five most popular options are November calls, with traders circling the 125 call the most. 


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 Master Portfolio Trial


Special Offers from Schaeffer's Trading Partners