The fast food giant missed first-quarter earnings and revenue estimates
The shares of Wendys Co (NASDAQ:WEN) are down 9.7% at $17.30 at last check, after the fast food concern missed first-quarter earnings estimates by 1 cent per share, and reported a revenue miss. The company's same-store sales growth also fell below Wall Street's estimates, as high inflation resulted in fewer orders during the latest quarter.
The security is now trading at two-year lows, its worst level since the pandemic-led 2020 stock market crash. The 20-day moving average has been pressuring shares lower since April, and the stock is today eyeing its biggest one-day percentage drop since June. Year-to-date, WEN is down 31.2%.
A shift in the options pits could push the equity even lower. This is per WEN's 10-day call/put volume ratio of 15.08 at the the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks higher than 87% of readings from the last 12 months. This means calls have been getting picked up at a much quicker-than-usual clip.
That shift seems to be already in motion today. In fact, 2,831 puts have crossed the tape so far, which is 11 times the intraday average, as opposed to the 1,397 call trades. Most popular is the January 2024 15-strike put, followed by the May 18 put.
These options traders are in luck, as Wendy's stock sports attractively priced premiums at the moment. This is per the security's Schaeffer's Volatility Index (SVI) of 60% that sits in the low 22nd percentile of its annual range, indicating options traders are pricing in low volatility expectations right now.