Options Bulls Board Southwest Stock After Earnings

Call traders are targeting weekly gains for LUV

Deputy Editor
Jan 28, 2021 at 10:37 AM
facebook X logo linkedin

Southwest Airlines Co (NYSE:LUV) took a trip to the earnings confessional this morning, and the airline company reported a smaller-than-expected fourth-quarter loss alongside a revenue miss. The airliner lost $3.1 billion in 2020, the first annual loss the company reported since 1972. Still, LUV was last seen up 1% to trade at $44.61, possibly enjoying some sector tailwinds today.

Like much of the travel and airline sector, Southwest Airlines stock suffered on the charts for the last 12 months, yesterday dipping to a two-month low of $43.87. Overhead, the $48.50 level has kept a lid on most rally attempts in the last three months, though the 80-day moving average has so far stepped up to contain the damage. Longer term, LUV has shed 21% year-over-year.

The options pits are home to some serious bullish activity. This is per the stock's 50-day call/put volume ratio of 3.32 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits higher than 70% of readings in its annual range, meaning long calls are being scooped up at a quicker-than-usual clip. 

That bullish sentiment is being echoed in today's options pits, as well. Already, 8,203 calls have crossed the tape, which is double the intraday average, versus 2,352 puts. The weekly 1/29 48-strike call is the most popular, and new positions are being opened there.

And for those who may be looking to jump aboard LUV with options, now looks to be an affordable time. Southwest Airlines stocks's Schaeffer's Volatility Index (SVI) of 54% sits in the 18th percentile of all other readings from the past year -- a boon for premium buyers.

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI