Delta Airlines (NYSE:DAL) stock is down 2.5% to trade at $82.80, after BMO trimmed its price target to $100 from $105. More broadly, the entire airline sector -- including American Airlines (AAL) and United Airlines (UAL) -- is in the red this morning, as higher fuel costs weigh.
Delta stock has dropped 13.5% since an all-time high of $95.67 on July 2. Year to date, the stock is up 19.8%, and there's support in place at the 126-day moving average just below.
Calls have been increasingly popular. DAL sports a 50-day call/put volume ratio of 4.58 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than all other readings from the past year, hinting at a much healthier-than-usual appetite for bearish bets over bullish of late.
Echoing this, DAL's Schaeffer's put/call open interest ratio (SOIR) of 0.31 sits in just the 2nd percentile of its annual range, suggesting short-term option players have rarely been more call-heavy during the past 12 months.
Delta has tended to underperform options traders' volatility expectations, per its Schaeffer's Volatility Scorecard (SVS) sits at a relatively low 20 out 100. This makes premium-selling an intriguing move going forward.
