FedEx Stock Pops After Long-Time CEO Steps Down

FedEx's options pits have heavily favored puts of late

Deputy Editor
Mar 29, 2022 at 9:34 AM
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The shares of FedEx Corporation (NYSE:FDX) are up 3% at $237 ahead of the open, after news broke that Chief Executive Officer (CEO) Fred Smith will step down from his role, after founding the delivery company more than 50 years ago. Smith will become executive chairman, effective June 1, with President and Chief Operating Officer (CFO) Raj Subramanian to take over as CEO. 

FedEx stock is breaking above $230 today, after more than a month of pressure from the level. The shares are also set to topple their 50-day moving average today, which has kept a lid on the stock since early February. FDX has staged a sizeable rally off its March 8, 19-month low of $199.03, but remains down 11.1% in 2022.

Options traders are leaning pessimistic toward the equity, according to FedEx stock's Schaeffer's put/call open interest ratio (SOIR) of 1.01. This ratio stands higher than 84% of readings in the stock's 12 month range, indicating a put-bias amongst short-term options traders.

Echoing this, FDX's 50-day put/call volume ratio of 0.76 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands higher than 92% of readings from the past 12 months. So, while calls have outpaced puts on an overall basis over the last 10 weeks, this ratio shows a healthier appetite for long puts over that time frame.

Now may be the time to join these options traders, as FedEx stock boasts an affordable premium. This is per the security's Schaeffer's Volatility Index (SVI) of 25%, which sits in the relatively low 10th percentile of its 12-month range, suggesting options traders are pricing in relatively low volatility expectations for the security at the moment. What's more, the equity's Schaeffer's Volatility Scorecard (SVS) of 98 (out of a possible 100) indicates FDX's tendency to outperform said volatility expectations during the past year. 

 

 

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