Options Bears Blast Cal-Maine Foods Stock Despite Earnings Beat

Year-to-date, the security has shed more than 6%

Digital Content Manager
Sep 29, 2021 at 10:49 AM
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The shares of Cal-Maine Foods Inc (NASDAQ:CALM) are up 0.8% to trade at $$36.17 at last check, after the company posted smaller-than-expected fiscal first-quarter losses of 37 cents per share -- as opposed to the estimated losses of 62 cents per share -- as well as a revenue beat. Though the food name sold fewer eggs in comparison to the same quarter last year, a higher selling price of $1.24 per dozen boosted revenue. Plus, specialty egg production is expanding, despite a lower demand for eggs as restaurants reopen.

It has been a volatile year for the equity so far. After cooling off from a rally to $38 level earlier this month, Cal-Maine Foods stock appears to have found a floor at the $34 mark. However, overhead pressure at its 200-day moving average has been keeping a tight lid on CALM since March, despite a brief pop above this trendline. Year-to-date, the stock is down 1.1%.

Shot sellers have been piling on the security. Short interest rose 10.5% in the most recent reporting period, and the 4.62 million shares account for a whopping 12.3% of CALM's available float. It would take nearly three weeks to cover these bearish bets, at the equity's average pace of daily trading. 

The options pits are firmly in the bearish camp, too. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), CALM's 10-day put/call volume ratio of 1.66 stands higher than 98% of readings from the past year, indicating puts have been getting picked up at a quicker-than-usual clip in the last two weeks.

Echoing this, the stock's Schaeffer's put/call open interest ratio (SOIR) of 2.35 sits higher than 73% of readings from the past year. In other words, short-term options traders have rarely been more put-biased.

Cal-Maine Foods stock's usually quiet options pits are bursting with activity today. So far, 850 puts and 87 calls have crossed the tape, which is 46 times what is typically seen at this point. The most popular is the October 32.50 put, followed by the November 40 put.


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