Options Bulls Circle United Natural Foods Stock Before Earnings

UNFI has a history of negative moves after reporting earnings

Deputy Editor
Sep 27, 2021 at 2:45 PM
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The shares United Natural Foods Inc (NYSE:UNFI) are up 4.4%, to trade at $38.68 this afternoon, just ahead of the food retailer's fiscal fourth-quarter earnings report, which is due out before the open tomorrow, September 27. Below, we'll dig into how UNFI has fared in the past, and see what post-earnings moves the options market is pricing in for the shares. 

History shows that United Natural Foods stock has made some pretty sizable moves the day after reporting earnings, though they're mostly in the negative. In fact, three of the last four quarterly reports have resulted in post-earnings pullbacks of over 14%, though the equity did pop 18.2% in March. Over the past two years the stock has averaged a swing of 17.2%. This time around, the options pits are pricing in a slightly lower 14.9% shift.

The penchant for big swings has caught the attention of options traders. So far today, 4,275 calls and 890 puts have exchanged hands, which is triple the amount that's typically seen at this point. Most popular by far is the October 45 call, indicating that these traders see potential upside within the next couple of weeks.

Longer term, the trend of calls outpacing puts is nothing new. In fact, United Natural Food stock's 10-day call/put volume ratio of 78 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits in the elevated 93rd percentile of its annual range. Further, short-term option players have rarely been more call-biased in the past 12 months. per UNFI's Schaeffer's put/call open interest ratio (SOIR), which sits in the low 16th percentile of other readings from the past year. 

Earlier today, United Natural Foods stock rallied on the charts, coming one penny shy of the $39 mark to trade at its highest level since June. The equity has fared well over the past month, with pullbacks cushioned by its 80-day moving average. Fresh off of its ninth weekly win in 10, UNFI boasts a 142% year-to-date lead. 

UNFI Chart September 27


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