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Options Traders Blast Constellation Brands Stock After Earnings

The security is down over 2% year-to-date

Deputy Editor
Oct 6, 2021 at 10:53 AM
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The shares of Constellation Brands, Inc. (NYSE:STZ) are lower this morning, down 0.2% to trade at $212.40, following the beer and wine maker's fiscal second-quarter earnings results. The company beat Wall Street's revenue estimates and also raised its full-year outlook, but reported worse-than-expected earnings of $2.38 per share, as opposed to analysts' estimates of $2.77 per share.

The equity's options pits are popping with activity. So far, 5,239 calls and 4,070 puts have crossed the tape, which is seven times the intraday average. Most popular is the weekly 10/8 215-strike call, followed by the 217.50-strike call in the same series, with new positions being opened at both.

A broader look shows calls have not been as popular of late. The security's Schaeffer's put/call open interest ratio (SOIR) of 1.24 sits higher than 90% of readings from the past 12 months. This implies short-term options traders have been much more interested in puts recently. 

Echoing this, STZ's 10-day put/call volume ratio of 1.55 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 80th percentile of its annual range. In other words, puts have been getting picked up at an unusually fast clip.

It's easy to see why traders have taken such a bearish stance. On the charts, STZ has struggled for much of the third quarter, falling below the once supportive 60-day moving average in July. JuST off from its fifth-consecutive monthly drop, Constellation Brands stock is down 2.7% year-to-date.
 

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