Advance Auto Parts (AAP) Soars 21.61% in Five Days Amid Unusual Options Activity

Advance Auto Parts (AAP) shares surged 2.11% today, marking the fifth consecutive day of gains, with a 21.61% increase over the past five days. The stock price reached its highest level since August 2024, with an intraday gain of 6.01%.

The strategy of buying AAP shares after they reached a recent high and selling them one week later resulted in a significant underperformance. Over the past five years, the strategy yielded a return of -64.60%, with a benchmark return of 56.99%. The strategy had a maximum drawdown of -76.87%, a Sharpe ratio of -0.67, and a volatility of 51.28%. This indicates that the strategy not only failed to generate any profit but also led to substantial losses, making it a poor approach for investors.

One of the most significant factors influencing the stock price of Advance Auto Parts (AAP) is the recent unusual options activity. Data indicates that major investors have adopted a bearish stance towards AAP, with a high volume of put options, suggesting an expected price movement between $25.0 to $75.0. Additionally, there are notable trades involving both puts and calls, indicating mixed sentiment but with a majority leaning bearish. This unusual options activity implies that market players anticipate significant upcoming changes in AAP's stock price.