Investment Stock Boasts Prime Buying Opportunity

KKR could benefit from a shift of sentiment in the options pits

Dec 28, 2021 at 12:50 PM

KKR & Co Inc (NYSE:KKR) is experiencing a bull flag pattern on the charts, with support from its 80-day moving average, which has propped up the stock multiple time this year. With the stock attempting to form a bottom around four times its 2020 low, now looks like a good time to bet on KKR's next leg higher.

KKR Chart Dec 28

Though pessimism is beginning to unwind in the options pits, KKR's 50-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) still sits higher than 80% of readings from the past year. Echoing this, the security's Schaeffer's put/call open interest ratio (SOIR) of 1.36 is in the elevated 92nd percentile of readings in its annual range. This means near-term put open interest outweighs call open interest by a wider-than-usual margin.

It's also worth pointing out that the security's Schaeffer's Volatility Scorecard (SVS) sits at a relatively high 76 out of 100, meaning the equity has exceeded option traders' volatility expectations during the past year. Lastly, our recommended call option sports a leverage ratio of 6.58, and will double on an 14.2% surge in KKR shares.

Subscribers to Schaeffer's Weekend Trader options recommendation service received this KKR commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.

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