BUY, SELL, HOLD (2)

Defense Contractor's Shares Soar After Fighter Jet Sale

The equity is recently removed from all-time highs

Deputy Editor
Mar 14, 2022 at 10:19 AM
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The shares of Lockheed Martin Corporation (NYSE:LMT) are up 1% at $443.60 at last check, after a source revealed to Reuters that Germany is purchasing up to 35 of the defense contractor's F-35 fighter jets. The new stealth jets will replace Berlin's ageing Tornado aircraft, which has been in use since the 1980s.

On the charts, Lockheed Martin stock has already seen impressive returns in the wake of Russia's invasion of Ukraine. In fact, LMT skyrocketed to an all-time high of $479.99 on March 7, and now boasts a 29.2% year-over-year lead. Today's positive price action also has the equity on track to snap a four-day losing streak.

Sentiment among options traders has been pessimistic overall, however. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Lockheed Martin stock sports a 50-day put/call volume ratio  that sits higher than 100% of readings from the past year. In other words, options traders are picking up long puts at a quicker-than-usual clip of late. 

Short-term options traders have been more put-biased than usual as well, per LMT's Schaeffer's put/call open interest ratio (SOIR) of 1.11. This ratio also sits in the 100th percentile of the security's annual range. 

 

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