Dick's Sporting Goods Options Volume Spikes After Earnings

Shorts have ramped up coverage on the retail stock

Managing Editor
May 29, 2019 at 11:24 AM
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Sports retailer Dick’s Sporting Goods Inc (NYSE:DKS) has erased early gains, now down 4.1% at $34.30 in this morning's trading, despite the company reporting an impressive first-quarter earnings beat and upwardly revised full-year guidance. The reason behind the pullback remains unknown, as today marks the seventh quarter in a row Dick's has beat analyst estimates, per Reuters. CEO Edward Stack said the company has begun to "see the benefits of our key strategies and investments." 

On the charts, the security has already had a volatile year -- down 16.7% since its April 10 annual high of $41.19, but still sporting a 9.8% year-to-date gain. Support has emerged out at the 320-day moving average for most of the year, though the stock is trading below this trendline during today's pullback.

In response to today's post-earnings swing, Dick's Sporting Goods options are flying off the shelves. Specifically, DKS has already seen more than 15,000 calls and 10,000 puts traded in the first two hours of the session -- 16 times its average intraday volume. It looks like some speculators are betting on more upside for the shares this week, with the weekly 5/31 37-strike call appearing to attract notable attention from options buyers.

Meanwhile, short interest on the equity surged 34.9% during the past two reporting periods, and now accounts for 27.3% of DKS' total available float. At the stock's current pace of trading, it would take shorts just over seven days to buy back their bearish bets.


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