Unusual Options Activity: Ryder System (R)

Shares of logistics and trading company Ryder System (R) have broken even over the past year amid a more tumultuous return for the S&P 500 index. One trader sees that outperformance continuing with a further rally in the coming weeks.

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  • That’s based on the November $80 calls. With 79 days until expiration, 5,032 contracts traded compared to a prior open interest of 110, for a 45-fold rise in volume on the trade. The buyer of the calls paid $3.65.

    With shares recently going for just over $76, they would need to rise less than 5 percent for the option to move in-the-money. And with a 52-week high of $93, the options could offer a potentially strong return from here.

    Ryder recently traded for about 6 times earnings, and those earnings grew 60 percent in the past year. Revenue is up 27 percent as well.

    Action to take: Shares look a bit oversold after the recent market drop. They may move a bit lower in the next few days, but could recover much of their move in the coming weeks. Today’s buyers can get a 3.1 percent dividend yield while waiting.

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  • For traders, the November $80 call options are betting on a quick rebound in shares. They can likely deliver mid-to-high double-digit gains in the coming weeks on such a move.


    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.