American Express (NYSE:AXP) stock is slipping today, brushing off the company's better-than-expected fourth-quarter revenue and 16% dividend increase, as investors focus on earnings of $3.04 per share that came in just below estimates.
At last glance, the shares were down 3.1% at $347.33, dropping below the $350 level, which had been providing support for pullbacks this month. Now trading at its lowest level since Nov. 21, AXP is off 5% since the start of the year. Should these losses hold, it will be the stock's sixth post-earnings drop in the last seven quarters.
Options traders have been quick to chime in, with 14,000 calls and 9,666 puts exchanged so far -- triple the overall options volume typically seen at this point. The weekly 1/30 382.50-strike call is the most popular, with new positions being opened there.
Calls have been more popular than usual leading up to today, too. AXP's 50-day call/put volume ratio of 1.80 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher than 98% of readings from the past year.
These options bulls are in luck, as options traders are pricing in low volatility expectations. The stock's Schaeffer's Volatility Index (SVI) of 35% ranks in the low 20th percentile of its annual range, meaning premium is reasonably priced at the moment.
