Defense stocks are in focus today, following news that the U.S. and Israel attacked Iran over the weekend, with missile strikes killing Supreme Leader Ayatollah Ali Khamenei. In response, Iran promised retaliation and also threatened to disrupt the Strait of Hormuz.
The shares of Lockheed Martin Corp (NYSE:LMT) were last seen up 4.4% to trade at a fresh record high of $692, while also sporting a 40% year-to-date lead. The stock is on pace for its biggest single-day percentage gain in over a month, with recent support emerging from the 20-day moving average.
An unwinding of pessimism in the options pits could keep tailwinds blowing for LMT. This is per the equity's 50-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 93% of annual readings. Echoing this, the security's Schaeffer's put/call open interest ratio (SOIR) of 1.13 ranks higher than all other readings from the past 12 months.
Drilling down to today's options activity, 4,212 calls and 3,825 puts have already crossed the tape -- five times the volume typically seen at this point. The most active contracts are the April 680 and 645 puts, with positions being opened at the former.
Plus, LMT's Schaeffer's Volatility Scorecard (SVS) comes in at 87 out of 100. In other words, shares have consistently realized higher volatility than its options have priced in over the past 12 months.
