Options Traders Bet on DraftKings Amid Disney Deal Rumors

DKNG has added over 32% in the past three months

Digital Content Manager
Oct 7, 2022 at 11:27 AM
facebook twitter linkedin

DraftKings Inc (NASDAQ:DKNG) is up 2.9% at $16.50 at last check, amid reports that the company is getting close to inking a partnership with Walt Disney's (DIS) ESPN. The deal could allow the sports channel to benefit from legalized sports betting, but details of the partnership remain elusive.

Nevertheless, options traders are blasting the security full-force. So far today, 67,000 calls and 13,000 puts have crossed the tape, or five times the volume that is typically seen at this point. Most popular is the weekly 10/7 18-strike call, where positions are being opened. This means these traders expect additional upside by today's close, when contracts expire.

Short-term options traders had been incredibly biased coming into today, though. This is per the equity's Schaeffer's put/call open interest ratio (SOIR) of 1.24, which ranks in the 95th percentile of its annual range.

Options sure are look like an intriguing way to speculate on DraftKing stock's moves. This is per the equity's Schaeffer's Volatility Scorecard (SVS) of 81 out of 100, which indicates the shares have consistently realized bigger returns than traders have priced in the past 12 months.

Meanwhile, short sellers have been building their positions, with short interest up 6.1% over the last two reporting periods. The 42.29 million shares sold short now account for 10.2% of the equity's available float. Should some of these shorts start hitting the exits, the security could surge even higher.

DraftKings stock is bouncing off a familiar floor near the $15 level, which contained its early September pullback as well. The 100-day moving average has been supporting the shares since August, and in the past three months DKNG has added over 32%, despite clinging to a hefty 65.9% year-over-year deficit.


Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 



Special Offers from Schaeffer's Trading Partners