EARN25

Bears Make a Play On Dick's Sporting Goods Inc (DKS)

Traders yesterday anticipated a post-earnings swoon at Dick's Sporting Goods Inc

Digital Content Group
Nov 18, 2014 at 10:28 AM
facebook X logo linkedin


Ahead of Dick's Sporting Goods Inc's (NYSE:DKS) turn in the earnings confessional this morning, options traders were extremely busy. Yesterday, in fact, puts were exchanged at seven times the norm, while call volume doubled the average daily amount.

Digging deeper, DKS' most active strike on Monday was the November 45 put, where buy-to-open activity could be detected. By scooping up the long puts, these traders are expecting the shares to drop below $45 by the end of this week, when the front-month options expire. Gains will accrue on a move down to zero, while the maximum potential loss is capped at the initial premium paid, should DKS maintain its perch atop $45 through Friday's close.

As alluded to earlier, DKS disclosed its third-quarter earnings report earlier, and the results were mixed. Earnings fell 1.5% year-over-year, but were still at the higher end of the company's guidance, and in line with the Street's consensus estimate.

That said, shares of Dick's Sporting Goods Inc (NYSE:DKS) are unchanged from Monday's close, at $47.51. However, delta on the aforementioned put has dropped to negative 0.12 from negative 0.26 last night, with the potential catalyst now in the rearview.

 

You Don’t Need 25 Alerts -- You Need ONE You Can Trust!

That’s the idea behind Trade of the Week, Schaeffer’s newest trade alert.

Every Monday morning before the opening bell, you’ll receive a single, expertly researched trade recommendation -- built from the same proprietary research we’ve been using for over four decades.

It’s not just a signal.

It’s a plan designed for traders who are tired of jumping from alert to alert without ever finding their edge.

No juggling alerts. No switching directions mid-week. Just one clear, expertly researched trade idea -- delivered before the market even opens.

👉 JOIN RIGHT NOW FOR JUST $1 TO GET THE NEXT TRADE!