Diageo plc (DEO) - Company Overview

    Business Profile

    Performance Overview

Sector: Consumer Staples
Industry: Distillers & Wineries

    Industry Context

Short-term leadership vs. long-term laggard
Long-term underperformance often reflects structural or fundamental issues (earnings pressure, macro headwinds). Short-term outperformance could fade if those problems persist.

    This could indicate:

• Early-stage rotation signal. Capital may be rotating into this sector after a prolonged period of neglect
• Possible trend reversal. Strong short-term performance relative to peers could mark the start of a longer-term recovery.
• Volatility-driven rebound. Sometimes sharp short-term moves in lagging industries are relief rallies or short covering.
• Industry rotation dynamics. Funds may be temporarily allocating to lagging industries during a risk-on phase.

    DEO Performance vs. Sector (Consumer Staples) peers and Overall Market

Consistent laggard. Diageo plc (DEO) has been underperforming its sector peers both long-term and short-term..

    Interpretation:

• Persistent weakness. The alignment across horizons suggests that the underperformance is not just temporary but embedded in its relative positioning.
• Lack of recovery signals. No evidence of improving momentum, Diageo plc stock is staying weak against its sector.
• Value trap risk. Being "cheap" relative to peers does not guarantee recovery, stock may stay weak or get weaker
• Sector-relative disadvantage. Even if the sector rises, this stock may continue to lag.
• Catalyst dependence. Only major positive catalysts (earnings surprise, turnaround news, restructuring) are likely to reverse the trend.
• Options traders. Bearish or neutral strategies (e.g., put spreads, call credit spreads) align with persistent weakness.

    DEO Volatility Analysis

• Implied Volatility (IV):     31%
• 1-Year IV Percentile:     0%
  Current IV is higher than 0% of readings over the past year, indicating options are still relatively cheap compared to their own 1-year history. Market expectations are calm. Less favorable for option sellers as premiums collected would not be very high. This creates some opportunity for option buyers, as you are still paying on the low side for long premium strategies, though not at absolute bargain levels.
• 1-Year IV Rank:     0
  Current IV Rank (0) is Very Low
  Interpretation:
  • Current IV is close to the lowest level of the past year.
  • Options are cheap relative to their history.
  • Market expects calm/stable conditions.
  • Risk: Volatility has room to rise from here (mean reversion).

    Options Sentiment

Call / Put Ratio

• Volume:  0%   ( 0% )
  Interpretation: Very bearish  Market Sentiment: This typically indicates that traders are actively positioning for downward price movement. The market is showing strong bearish sentiment, with many traders buying puts in anticipation of a decline. This could also suggest hedging against downside risk or a general belief that the price will fall.
• Open Interest:  0%   ( 0% )
  Interpretation: Strongly Bearish  Market Sentiment: Substantially more put open interest. Traders heavily positioned for downside or hedging aggressively. May signal capitulation or oversold conditions if extreme.
• Notional Value of Options Traded:  0%   ( 0% )
  Interpretation: Strongly Bearish  Market Sentiment: Put notional value far exceeds calls. Large capital flowing into downside protection or bearish bets. Often seen during panic, market stress, or strong downtrends.
• Implied Volatility:  102%   ( -2% )
  Interpretation: Mildly Bullish  Market Sentiment: Suggests a mild bullish bias, where the implied volatility for calls is slightly higher than for puts. This indicates that investors are somewhat expecting upward movement or more volatility to the upside. There is a small preference for upside movement, but it is not extreme. Traders might anticipate a moderate increase in price or are hedging for some potential upside, but the sentiment is not strongly bullish.

Market value of open interest and average strike price weighted by open interest.

The average cost per option contract (calculated as mid-price weighted by open interest) for a given expiration month is a proxy for where traders' capital is most heavily positioned.

• A higher normalized value indicates that the open interest is concentrated in more expensive options (higher implied volatility or deeper ITM).
• A lower normalized value suggests open interest is focused on cheaper, out-of-the-money, or low-volatility options.

The average strike price weighted by open interest shows the "center of gravity" of traders' positioning for that expiration month. The strike price around which the majority of open interest (and thus traders' exposure) is concentrated.

• If the value is above the current stock price, it means traders' open interest is concentrated in higher strikes (bullish bias).
• If it's below the stock price, open interest is more concentrated in lower strikes (bearish bias).
• If it's near the current price, positioning is balanced around the current underlying level.

     High Probability Trades

The following high-probability options trade ideas can be considered for DEO