Delta Air Lines Stock Floats Higher After Earnings

DAL options pits are busy this morning

Deputy Editor
Jan 13, 2022 at 10:31 AM
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Delta Air Lines Inc (NYSE:DAL) announced positive fourth-quarter results before the bell this morning, with profits of 22 cents per share on revenue of $9.47 billion. Both of these came in higher than analysts' expectations of 14 cents per share on $9.21 billion. However, the company warned of current-quarter losses due to the Covid-19 omicron variant. At last glance, DAL was up 4.2% to trade at $42.36. 

After falling to annual lows in early December, Delta Air Lines stock has tacked on 15% in the last month. Now, DAL is retesting its 200-day moving average for the first time since mid-November. Year-over-year, the equity is looking to find some separation from its 12-month breakeven level.

Over in the options pits, though calls have been outweighing puts on an absolute basis at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), DAL's 50-day put/call volume ratio of 0.37 sits higher than all other readings from the past year. This indicates long puts being picked up at their fastest pace in the last 12 months. 

Today, options volume is running at six times DAL's typical intraday average. So far, 57,000 calls and 17,000 puts have crossed the tape. The weekly 1/14 42-strike call is the most popular by far, with new positions being opened there. This means plenty of options traders have been betting on more upside by the contract's expiration tomorrow. 

Meanwhile, DAL ranks low on the Schaeffer's Volatility Scorecard (SVS), with a score of just 16 out of 100. In other words, the security has consistently realized lower volatility than its options have priced in, making the stock a potential premium-selling candidate.

 

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