Options Bulls Eye More Gains for Olive Garden Parent

DRI is up over 135% year-over-year now

Digital Content Manager
Mar 25, 2021 at 10:17 AM
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The shares of Darden Restaurants, Inc. (NYSE:DRI) are up 2.9% at $137.82 at last check, after the security reported better-than-expected fiscal third-quarter earnings, as well as revenue beat. The Olive Garden parent's fiscal fourth-quarter outlook also came in well above analysts' estimates, and the company announced both quarterly dividends and a $500 million share buyback program.

The stock is fresh off a March 15, all-time high of $147.75, a culmination of a channel of higher highs first dug out during the April 2020 bottom. Along the way, pullbacks in November and January were contained by the shares' ascending 80-day moving average. Year-over-year, DRI sports a 135.2% lead.

The options pits show a strong appetite for calls. This is per DRI's 50-day call/put volume ratio of 1.92 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands in the 92nd percentile of its annual range. In other words, calls are being picked up at a faster-than-usual clip.

The security's usually quiet options pits are brimming with activity today. Amid low absolute volume, 668 calls and 322 puts have crossed the tape so far -- three times the intraday average. The most popular is the April 140 call, followed by the 145 strike in the same series.

What's more, DRI options are affordable at the moment. The security's Schaeffer's Volatility Index (SVI) of 41% sits in the 11th percentile of its annual range. In simpler terms, this means the equity is sporting attractively priced premiums right now.

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