Options traders are eyeing WHR ahead of the event
The shares of Whirlpool Corporation (NYSE:WHR) are up 1.8% at $217.08 this afternoon, as investors gear up for the appliance company's second-quarter earnings, which are due out after the close tonight. The shares of WR are testing the 10-day moving average today -- a previous trendline of support that Whirlpool stock breached late last week. For the year, WHR is up 20%.
Options traders are kicking into high gear ahead of the event. So far, 6,214 calls and 6,792 puts have crossed the tape -- five times the average intraday amount. The most popular contract is the weekly 7/23 210-strike put, followed by the 200-strike put in the same weekly series, with positions being opened at the latter.
Analysts are still hesitant on Whirlpool stock, even though earlier this month, J.P. Morgan Securities named the stock a "top pick." Of the five in coverage, just one considers WHR a "strong buy."
Meanwhile, short interest has seen a sharp drop on Whirpool stock, off 20% in the last two reporting periods. There's a chance a further unwinding of pessimism could put some additional wind at WHR's back, as short interest makes up 6% of the stock's available float, and would take six days to cover, at Whirlpool stock's average daily pace of trading.
Whirlpool stock has a mixed history of post-earnings moves, with positive returns after half of its last eight reports. WHR has averaged a next-day swing of 3.7% during this time period, regardless of direction. This time around, the options pits are pricing in a much bigger move of 7.9%.