Darden Restaurants Stock Hungry for More Upside

DRI short-term options traders are extremely put-skewed

Jul 11, 2017 at 10:33 AM
facebook twitter linkedin


Darden Restaurants, Inc. (NYSE:DRI) has been a steady climber on the charts, sporting a year-to-date gain of roughly 24%. In fact, an impressive earnings report in late June sent the shares to record-high territory. More recently, DRI pulled back to its historically supportive 40-day moving average, suggesting it could be a good time to get behind the equity for its next leg higher.

170707dri

Most analysts remain skeptical of the stock, though. For example, 12 of 18 brokerage firms rate DRI a "hold" or "sell." It would seem the outperformer is overdue for bullish analyst attention, which could create tailwinds.

Plus, short-term options traders are extremely put-skewed. This is according to DRI's Schaeffer's put/call open interest ratio (SOIR) of 3.32, which ranks just 4 percentage points from a 12-month high. An unwinding of these positions could also help Darden Restaurants climb the charts.

It's also a good time to target near-term options on DRI. This is according to the stock's Schaeffer's Volatility Index (SVI) of 21%, which lands in the low 6th annual percentile. This indicates low volatility expectations are priced into short-term options. Plus, our recommended call option has a leverage ratio of 8.5, and will double in value on an 11% gain in the underlying shares.

Subscribers to Schaeffer's Weekend Trader Series options recommendation service received this DRI commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.

 

If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

 


 


 
Special Offers from Schaeffer's Trading Partners