Schaeffer's 43rd Anniversary Stock Picks in 2024

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 X logo 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.

 

A.I.’s Dirty Little Secret: The Real Power Behind The AI. Boom ✨

Anyone who’s seen the The Matrix movies knows that A.I. needs power.  Lots and lots of power.

If you’ve seen the movie, you also know the grizzly results of the ensuing battle for that power.

Now, Wall Street’s battle for A.I. power won’t go to such extremes. Hopefully?

A.I. needs more power and that means more opportunities for stock traders in the know.

Download your free copy of “The A.I. Revolution: 4 Stocks to Buy Now”!