Newell Stock Could Be Staring Down Options-Related Headwinds

Short-term options traders are extremely call-heavy towards NWL stock

Oct 10, 2017 at 10:20 AM
facebook X logo linkedin

Shares of consumer products company Newell Brands Inc (NYSE:NWL) have been sliding since an early August earnings report, and a downwardly revised full-year guidance early last month sent the equity to an annual low. NWL is now down more than 16% year-over-year, but sentiment surrounding the stock remains overly bullish.



Analysts, for example, are extremely optimistic. By the numbers, nine of 13 covering brokerage firms have "buy" or "strong buy" ratings on the shares. A round of downgrades could come through and lead to extended downside.

And options traders are abnormally call-skewed at the moment, evidenced by NWL's Schaeffer's put/call open interest ratio (SOIR) of 0.29, ranking just 4 percentage points from an annual low. With much of this call open interest residing at strikes just above the stock's current perch, short-term headwinds could be in store.

It's certainly a good time to target near-term options, based on the Schaeffer's Volatility Index (SVI) of 20%, which ranks below 87% of all similar marks from the past year -- hinting at low volatility expectations at the moment.

Subscribers to Schaeffer's Weekend Trader Series options recommendation service received this NWL 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.


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 calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI