UNP Stock Ripe for Bullish Options Trade

UNP stock is bouncing from a key technical level

by Research Dept.

Published on Apr 2, 2019 at 10:44 AM

Freight giant Union Pacific Corporation (NYSE:UNP) has put together a strong 2019, adding over 20% year-to-date. Back in early February, the company announced a massive buyback plan that amounted to 20% of the outstanding shares, which should act as a tailwind going forward. Plus, UNP recently bounced from the $160 level, site of its December highs, and could now be eyeing a fresh run to record highs.

WKEND UNP Chart March 29

 

Interestingly, options traders have been bearish toward the equity, with the 10-day put/call volume ratio of 2.93 ranking only 4 percentage points from a 12-month high at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Also, the Schaeffer’s put/call open interest ratio (SOIR) of 1.01 shows a rare put-skew among near-term traders. As such, an unwinding of all these bearish positions could fuel upside for UNP.

Union Pacific has a Schaeffer’s Volatility Index (SVI) of 23%, which ranks in the 34th annual percentile, showing relatively low volatility expectations priced into near-term contracts. Our recommended call option has a leverage ratio of 10.4, and will double in value on a 9% gain in the underlying stock.

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


a schaeffer's exclusive

5 NEW STOCK PICKS

We're celebrating 38 years with this FREE insider report!


 
 

Partnercenter


NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories


The "Trick" Used By the World's Wealthiest
A simple way to stop picking losers, and start cashing in like Wall Street's elite.
2 Retail Stocks at New Lows Today
Escalating U.S.-China trade tensions are creating stiff headwinds
Stocks Erase Weekly Gains After Trump Reacts to China Retailiatory Tariffs
A brief yield-curve inversion also spooked Wall Street
The "Trick" Used By the World's Wealthiest
A simple way to stop picking losers, and start cashing in like Wall Street's elite.