Improve Your DraftKings Odds With This Play
I'm joining insiders and looking to score. Here's what I've drawn up.
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Today, we are going to step away from the biotech sector for our latest trade idea. This trade target provides a product that I used regularly, especially during the football season. The stock has also seen some recent insider purchases, something that hasn’t happened for a long time.
The company in question is DraftKings (DKNG) , which offers a digital gaming and entertainment platform, providing online (and retail) sports betting, daily fantasy sports, and an online casino, among other offerings primarily in the U.S. and Canada. DraftKings currently has a market capitalization of around $15 billion.
DraftKings is focused on three areas. The first is an online sportsbook, as well as retail sportsbooks located in 14 states. Year to date in 2025, it generated revenue of $2.48 billion on a handle (total value of bets rendered) of $36.76 billion, versus revenue of $2.08 billion on a handle of $33.16 billion for the same period in 2024, representing increases of 19% and 11%, respectively. The unit competes in a duopoly with Flutter Entertainment’s (FLUT) FanDuel, with both holding a mid-30s percentage market share of the total handle outside of Nevada, according to Casino Reports.
The company’s iGaming division is also in a duopoly with FanDuel, although the percentages are slightly more modest, with the latter enjoying a 28% share versus 24% for the former in September 2025. This division generated revenue of $1.30 billion year to date in 2025, as compared to $1.08 billion in for a gain of 21% for the same period in 2024.
The Other segment houses daily fantasy sports, digital lottery courier, gaming software, and advertising revenue, among others. Year to date in 2025, it accounted for revenue of $285.0 million versus $215.1 million for the same period a year earlier, representing an improvement of 33%. This business segment offers a terrific NFL offering every Sunday.
The company also has recently entered the fast-growing predictions market via the acquisition of Railbird, which received its designated contract market license from the Commodities Future Trading Commission in June 2025. Announced on October 21, 2025, DraftKings paid an upfront cash and stock consideration of $48.6 million with incentives up to $200 million based on post-closing performance metrics.
DKNG stock is down by just over one-third from its highs this summer. Part of this is the company’s sportsbook has had a rough start to the NFL season with users winning $300 million above expectations during the first two months of the NFL season.
The company is likely to post a small loss in 2025. However, analysts have profitability ramping up impressively over the next several years on revenue growth of just north of 20% annually.
Management recently doubled its stock buyback authorization to $2 billion, and the company has a solid balance sheet. Two directors purchased just over $1 million worth of stock this week. It was the first insider buys in the stocks in years.
DraftKings appears to have a solid future but is going through a few hiccups right now. I want to establish a position in the name, but at a lower potential entry point than straight equity. A covered call trade enables that goal.
Option Strategy
This is how one can initiate a holding in DKNG with a covered call order. As a reminder, covered-call orders involve buying an equity and simultaneously selling just out of the money call strikes against the new position.
Using the June $28 call strikes, fashion a covered call order with a net debit in the $23.50 to $23.70 a share range (net stock price - option premium).
This strategy provides downside protection of 20% with upside potential in the high teens over the option duration even if the stock declines 5% from current trading levels.
At the time of publication, Jensen was long DKNG.
