This Dow Stock is Sprinting into 2023

Put traders are piling on PG even during its recent hot streak

Dec 14, 2022 at 10:37 AM
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Back in October, Procter & Gamble Co (NYSE:PG) saw a huge influx of options traders after the blue-chip's upbeat earnings report. While those options traders mostly preferred calls, two months later, the options landscape is decidedly different. 

At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio of 1.40 ranks in the 85th annual percentile, meaning the rate of put buying relative to call buying has picked up the pace in recent weeks.

What's interesting though is that Procter & Gamble stock hasn't had a losing week since Nov. 4. The shares' 10-day moving average has stepped up as support during this torrid push higher, with PG heading for its highest close since May 17 today. Take a look at this beautiful v-formation below:

PG Stock Chart

Since the equity's Oct. 10 annual low of $122.18, PG has tacked on 26%. With the stock down 5.8% year-to-date, it will be interesting to see if PG can reclaim its year-to-date breakeven level before the New Year.  

Now might be the perfect time for options players to speculate on the stock's next move higher. PG's Schaeffer's Volatility Index (SVI) of 19% sits in the 14th percentile of its annual range. Plus, its Schaeffer's Volatility Scorecard (SVS) checks in at 89 out of a possible 100. This means that not only are options traders pricing in relatively low volatility expectations at the moment, PG tends to exceed said expectations -- a boon for premium buyers. 

 

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