2 Stocks Options Traders Are Circling

Both stocks are substantially lower today

Deputy Editor
Feb 23, 2023 at 12:12 PM
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Teladoc Health Inc (NYSE:TDOC) and Domino's Pizza Inc (NYSE:DPZ) are seeing unusual options volume following their respective earnings results. 

Teladoc Health yesterday reported steep fourth-quarter losses of $23.49 per share, an extreme difference from analysts' expectations of a -25 cents per share. While the company's revenue did beat forecasts thanks to expanding product offerings and enhanced level of care, the shares were last seen down 13.6% to trade at $25.42 and adding to a hefty 58.5% year-over-year deficit.

On the charts, Teladoc stock is trading at its lowest level since mid-January. The equity is managing to maintain a 7.3% year-to-date lead, however, even after a 13.6% month-to-date dip.

More than 21,000 calls and 14,000 puts have been exchanged at the session's halfway point. The most popular contract is the March 30 call, followed by the April 22.50 call. Analysts are weighing in as well, with no less than four price-target cuts rolling in. However, SVB Securities did upgrade TDOC to "outperform" from "market perform."

Concerning Domino's Pizza, the company delivered revenue that fell short of estimates, as rising food, transportation, and labor costs and wavering demand weighed. Earnings of $3.97 per share edged out the $3.94 expectations, however, though same-store sales of 0.9% missed the mark by a considerable margin. 

In response, 5,707 calls and 5,336 puts have crossed the tape so far today -- six times the volume typically seen at this point. Most popular is the weekly 2/24 300-strike put, while new positions are being opened at the second most popular contract, the 355-strike call from the same weekly series. 

Domino's Pizza stock was last seen 10.8% lower to trade at $311, resulting in a bear gap on the charts that is eyeing the equity's worst daily percentage drop since May 2010 and their lowest mark since October. As a result, DPZ now sports double-digit year-over-year and year-to-date deficits.

 

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