Airline Stock Dips on the Heels of $140 Million Fine

LUV shed more than 14% in the last 12 months

Digital Content Manager
Jan 2, 2024 at 10:45 AM
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Southwest Airlines Co (NYSE:LUV) stock was last seen down 0.8% to trade at $28.65. While there's no specific catalyst for today's movement, the U.S. Department of Transportation (DOT) recently fined the company $140 million for a 10-day long holiday crisis in 2022 that left more than 2 million travelers stranded.

The shares are eyeing their first close below the 20-day moving average since November, though support at the $28 level looks ready to contain this pullback. In the past 12 months, LUV shed 14.9%.

Calls have been more popular than usual lately, per Southwest Airlines stock's 50-day call/put volume ratio of 2.03 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits higher than 74% of readings from the past year. An unwinding of this optimism could drive LUV lower still.

It's also worth noting that the equity's Schaeffer's Volatility Scorecard (SVS) of 98 out of a possible 100 means it has usually exceeded volatility expectations over the past year. In other words, options appear to be a good way to weigh on Southwest Airline stock's next moves.

 
 

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