Union Contract Drama Cools Off UPS Stock

UPS is facing off with its year-to-date breakeven level now

Managing Editor
Jul 5, 2023 at 10:34 AM
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United Parcel Service, Inc. (NYSE:UPS) stock is in focus this morning, off by 2.1% to trade at $179.61. In a game of 'he-said, she-said,' the teamsters union tweeted that the logistics giant had "walked away" from contract negotiations, after the UPS offer was unanimously turned down by teamsters negotiators. UPS is saying the opposite.

A strike potential strike would put daily deliveries in a bind, with over 340,000 workers under contract. On Monday, UPS closed at its highest level since April 24, but today the stock is set to snap a six-day win streak. The shares are up 3.2% year-to-date. 

Call trading has been elevated lately. UPS' 50-day call/put volume ratio of 1.66 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits in the 82nd percentile of its annual range, implying a healthier-than usual appetite for long calls of late. 

However, the equity ranks low on the Schaeffer's Volatility Scorecard (SVS), with a score of 25 out of 100. In other words, UPS has consistently realized lower volatility than its options have priced in, making the stock a potential premium-selling candidate.


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