Options Bears Chime in After SoftBank Sells DoorDash Stake

Things have been rocky since the company's mixed earnings report last week

Deputy Editor
Aug 19, 2021 at 12:49 PM
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The shares of DoorDash Inc (NYSE:DASH) are off 4.66% at $182.38 this afternoon, following earlier news that SoftBank is selling $2.2 billion worth of its stake in the company, via a block trade through Goldman Sachs (GS). The trade offered 11.4 million shares priced at $182.95, and is the latest in SoftBank's stock selling rampage, which totaled $14 billion last quarter. 

Options bulls are blasting DoorDash, with 11,000 puts across the tape so far -- double the intraday average -- compared to 7,324 calls. The two most popular are the August 180 and 185 puts, with positions being bought to open at the former. This means these investors are expecting even more downside for DASH by the time these contracts expire tomorrow, Aug. 20. 

Overall, calls have been outpacing puts. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), DASH sports a 50-day call/put volume ratio of 1.46. Regardless of where you stand on DASH, options look like a solid way to speculate on its next move. The security's Schaeffer's Volatility Index (SVI) of 47% stands higher than only 2% of readings from the past year. This means options traders are pricing in relatively low volatility expectations for the time being. 

The equity just came off a mixed earnings report. And while the security turned volatile that day it eventually settled with a win. The $195 level, however, looks to be acting as a layer of resistance on the charts. On the other hand, the 40-day moving average could help contain some of today's selloff. Year-to-date, DASH is up 28%. 

dash aug 19

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