Bullish Options Traders Blitz Ferrellgas Partners, L.P. (FGP) Ahead of Earnings

Ferrellgas Partners, L.P. (FGP) is slated to report earnings ahead of tomorrow's open, and call buying has been popular ahead of the event

Dec 8, 2016 at 3:16 PM
facebook X logo linkedin


Ferrellgas Partners, L.P. (NYSE:FGP) is slated to take its turn in the earnings confessional tomorrow morning, and ahead of the event, the energy stock is soaring on an upgrade to "sector perform" from "underperform" at RBC. And while the brokerage firm said Ferrellgas Partners had "focused on reducing its debt leverage to more optimum levels," it slashed its price target on the shares to $6 from $11. Nevertheless, FGP stock is trading up 16.8% at $6.93, and options traders are calling for even more post-earnings upside.

At last check, FGP calls were trading at three times the average intraday pace, with 3,404 contracts on the tape. Puts are also crossing at a faster-than-usual clip, though just 531 put options have traded. The December 7.50 call has seen the most action, and it looks like most of the 2,125 contracts that have changed hands may have been bought to open. If this is the case, call buyers expect FGP stock to break out above $7.50 by next Friday's close, when the front-month options expire.

Today's call-skewed trading is hardly new in FGP's options pits. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculative players have bought to open 5.05 calls for each put over the past 10 sessions. Plus, the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.36 ranks lower than 93% of all comparable readings taken in the past year. In other words, short-term speculators are more call-heavy than usual toward FGP.

Outside of the options pits, sentiment is more mixed. Short interest, for example, has dropped 55% since hitting a four-year high in early October, and currently accounts for just 1.8% of the stock's available float. Analysts, meanwhile, are fairly skeptical. Although a number of brokerages have joined RBC in upwardly revising their ratings recently, all seven analysts covering the shares maintain a "hold" opinion or worse.

Historically speaking, the shares of Ferrellgas Partners, L.P. (NYSE:FGP) tend to underperform in the session subsequent to reporting -- closing lower in seven of the past eight quarters. This would only echo the energy stock's longer-term technical trajectory, with FGP down more than 58% year-to-date, and fresh off a Dec. 1 record low of $5.04.

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical levels, and top economic stories straight to your inbox.
 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI