Shares of AeroVironment Inc. (NASDAQ:AVAV) are up 1.8% to trade at $287.61 at last check, after the defense company secured a $874.26 million contract with the U.S. army for its unmanned aerial systems (UAS) and counter-UAS systems. The news come before the drone maker's fiscal second-quarter report, which is due out after today's close.
The stock has been moving lower since its Oct. 9, record high of $417.86, but is still up 83.5% year to date, with a floor at the $260 region containing its recent pullback. Shares could today topple resistance at the 20-day moving average, which emerged back in late October.
AVAV sports a 50-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) that ranks higher than 99% of all other readings from the past year. In other words, an unwinding of pessimism could create additional tailwinds for the equity.
Drilling down to today's options activity, 1,563 calls have already crossed the tape -- double the volume that is typically seen at this point. Most popular is the December 280 put, where new positions are being opened.
It's worth noting that the security has tended to exceed option traders' volatility expectations over the last year. This is per its Schaeffer's Volatility Scorecard (SVS), which sits at 99 out of 100.
