Options Traders React To Mattel's Big Day

Mattel's revenue was seemingly unaffected by tariffs

by Patrick Martin

Published on Oct 30, 2019 at 2:40 PM

It's been a volatile week for Mattel Inc (NASDAQ:MAT). After a 6.5% drop last Tuesday, the shares are up 13.2% to trade at $13.20 today after the company reported a third-quarter revenue beat, seemingly brushing off any impact from tariffs. The toy company also also resolved the recent accounting probe stemming from a whistleblower report from August. In response to the big day, options traders are testing the water in greater numbers today.  

With just under two hours left in trading, more than 13,000 MAT options have crossed the tape so far -- 11 times the average intraday amount, and almost double the amount of puts traded. Leading the charge is the weekly 11/1 11.50-strike call, but there are also new positions being opened at the 12.50- and 13-strikes at the same series.

And near-term options traders are skeptical it would seem, since the Schaeffer's put/call open interest ratio (SOIR) comes in at 3.18. This reading ranks in the 85th annual percentile, too, so it's rare to see traders targeting contracts that expire within three months sitting so put-skewed. Much of this is at far out-of-the-money strikes, however, with peak open interest sitting at the January 2020 9-strike put.

Mattel Stock is cruising toward its fourth straight win, and has now added 27% off its Aug. 28 bottom near $9. Meanwhile, the strong results sparked two price-target hikes to $13 and $11 from SunTrust Robinson and Jefferies, respectively. That's especially noteworthy considering seven of the nine analysts in coverage rate MAT a tepid "hold." 

A Schaeffer's exclusive


Access your FREE insider report before it's too late!



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

Former Hedge Fund Manager Makes $25,000 "Trading Breakthrough"
Click to continue to advertiser's site.
Fed Meeting Headlines Earnings-Packed Week
Several big blue-chip and FAANG names will enter the earnings confessional
Amphenol Stock Sees Bullish Attention Post-Earnings
APH put options have been popular
The IRS Loopholes Retirees Need to Know
Click to continue to advertiser's site.