Best Buy Stock Surges on Dividend Hike Announcement

Options bulls are blasting BBY despite a revenue miss

Digital Content Manager
Mar 3, 2022 at 10:19 AM
facebook twitter linkedin

Best Buy Co Inc (NYSE:BBY) is up 9.3% to trade at $110.35 this morning, despite the technology retailer posting a fourth-quarter revenue miss and worse-than-expected 2023 forecast, while profits were in line with analysts' estimates. Constrained inventories and staffing challenges were to blame for the lukewarm results. What's boosting the equity instead is a 26% hike in quarterly dividends to 88 cents per share, as well as plans to buy back about $1.5 billion in shares next year. 

The security earlier surged to its highest trading level since November, extending a bounce off its Feb. 24, roughly two-year low of $85.58. The shares yesterday toppled overhead pressure at the 60-day moving average as well, though they remain far off their Nov. 22, all-time high of $141.97. Year-over-year, Best Buy stock is up 8.4%. 

Short sellers have been piling on the equity of late. In fact, short interest rose 31.4% over the most recent reporting period, and the 13.57 million shares sold short make up 6.3% of the stock's available float, or nearly one week's worth of pent-up buying power.

The options pits lean bearish, too. This is per Best Buy stock's Schaeffer's put/call open interest ratio (SOIR) of 1.22, which sits higher than just 94% of readings from the last year. In other words, short-term options traders have rarely been more put -biased.

A sentiment shift could be taking place today, though. So far, 14,000 calls and 8,974 puts have crossed the tape, or 14 times the intraday average. Most popular is the 3/4 110-strike call, followed by the 122-strike call in the same weekly series, with positions being opened at both.


Now is the time to join our thriving community of Event Traders who consistently profit from every earnings season. With this discounted subscription opportunity, you'll stay ahead of the curve and seize opportunities others miss. Do not let Q3 earnings season pass you by – subscribe now and supercharge your portfolio with expert insights that turn market reactions into profit-generating opportunities!! Don't waste another second... join us right now before the next trade targeting +200% is released!