Options Traders Keep Betting on Struggling DraftKings Stock

Options can be had for a bargain right now

Deputy Editor
Nov 8, 2021 at 2:20 PM
facebook twitter linkedin

After a promising start to the year, things have gotten a little murky for sports betting staple DraftKings Inc (NASDAQ:DKNG). The security recently slipped below a floor at the $48 level, with pressure from its 30-day moving average, but appears to have found potential support at the $42 mark. Fresh off its worst weekly performance since late September, DKNG has now shed just over 5% in 2021, though today it was last seen up 1.3% to trade at $44.20.

DKNG Chart Nov 8

Meanwhile, DraftKings stock has managed to nab a spot on Schaeffer's Senior Quantitative Analyst Rocky White's list of stocks that have attracted the highest weekly options volume within the past two weeks, with new names to the list highlighted in yellow. According to White's data, 557,737 calls and 227,270 puts were exchanged over this two-week period. The most popular contract during this time period was the weekly 10/29 50-strike call.

Most Active Options November 8

Short-term options traders have been unusually bearish, of late. This is per DKNG's Schaeffer's put/call open interest ratio (SOIR), which stands higher than 95% of readings from the past 12 months. In other words, these traders have rarely been more put-biased, despite calls winning out on an absolute basis.

Those looking to join these buyers can do so at a steal right now. DraftKings stock's Schaeffer's Volatility Index (SVI) of 55% sits higher than just 22% of readings from the past 12 months, suggesting options players are pricing in low volatility expectations for the stock at the moment. 


Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

Schaeffer's Daily Bulletin Offer


Special Offers from Schaeffer's Trading Partners