Options Bulls Swarm Delta Air Lines Stock After Earnings

Weekly calls are flying off the shelves as DAL may have found a bottom

Deputy Editor
Oct 12, 2023 at 10:05 AM
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Delta Air Lines, Inc. (NYSE:DAL) stepped out of the earnings confessional unscathed this morning. The airliner reported better-than-expected third-quarter earnings of $2.03 per share to go with record-setting revenue, the latter a 60% increase from a year earlier amid strong travel demand. Despite this, DAL opened roughly 0.8% lower, but was last seen up 0.4% to trade at $36.13.

Delta will need to stack a lot more days like today to dig out of the 29% haircut the airline stock has taken since a July 13 two-year high of $49.81. And while DAL is still holding its +10% year-to-date level in 2023, the equity is facing short-term pressure at its descending 20-day moving average.

Leading up to today, calls outpaced puts, but the latter have been picked up at a quicker-than-usual clip lately. This is per Delta Air Lines stock's 50-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 91% of annual readings.

Today, the 25,000 calls changing hands are more than double the number of puts exchanged, and volume pacing for seven times the average intraday amount and in the 99th percentile of its annual range. New positions are being opened at the weekly 10/13 36- and 37-strike calls, while the October 37 call is seeing notable attention as well. 

Options are a prudent route, per the security's Schaeffer's Volatility Scorecard (SVS) of 90 (out of 100). This means DAL exceeded option traders' volatility expectations during the past year. 


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