Don't Sweat the DraftKings Stock Pullback

Shares of DraftKings Inc (NASDAQ:DKNG) were past seen down 3.9% astatine $39.99, aft the sports betting giant closed connected its elder secured Term Loan B recognition installation for an accrued $600 cardinal -- up from the initially announced $500 cardinal connected the heels of higher demand.

The banal is present trading beneath its 126-day moving average, aft spending a sizeable magnitude of clip supra it. Specifically, DKNG had traded northbound of this trendline 80% of the clip successful the past 2 months and successful 8 of the past 10 sessions. Historical information from Schaeffer's Senior Quantitative Analyst Rocky White suggests that akin signals successful the past 3 years resulted successful a 75% triumph rate, with the banal averaging an 18.94% summation implicit the pursuing month.

A comparable determination from existent levels could propulsion DraftKings stock backmost supra $47.50, reclaiming its year-over-year breakeven mark. Despite today’s pullback, the banal remains up 7.7% successful 2025.

Options traders whitethorn privation to instrumentality enactment of shifting sentiment. The 10-day put/call measurement ratio astatine the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks successful the 97th percentile of readings implicit the past year, indicating a heavier-than-usual penchant for puts.

Meanwhile, abbreviated sellers are expanding their bets. Short involvement jumped 21.6% successful the latest reporting period, with 26.92 cardinal shares sold short, representing 5.7% of DKNG’s disposable float. At the stock’s mean gait of trading, it would instrumentality astir 3 days for shorts to screen their positions.

Now could beryllium an opportune clip to speculate connected DKNG’s adjacent determination via options. Schaeffer’s Volatility Index (SVI) of 50% sits successful the comparatively debased 17th percentile of yearly readings, suggesting options traders are presently pricing successful little volatility expectations -- a imaginable vantage for those looking to initiate caller bullish bets.