A lot of shuffling going on out there as earnings are announced. Today, these are the interesting trades I see happening:
UNUSUAL OPTIONS ACTIVITY
1. “I See Value Right Here” Says the Put Seller
2. It’s About Time This Stock Got Some Love
3. You Don’t Have to Like the Stock to like the Options
Let’s get right to it…
UNUSUAL OPTIONS ACTIVITY UBER STOCK
“I See Value Right Here” Says the Put Seller
UBER’s earnings were released after the bell yesterday, and it was a mixed bag. A little good – beat on top and bottom line. Little bad – losing a LOT of money. And still a little uncertainty – Delta variant. That said, the CEO sees EBITDA profitability in the 4th quarter… I promise.
Here’s Techcrunch’s good summary on the quarter:
Analysts had expected the company to post revenues of $3.74 billion, and earnings per share of -$0.51, per data collected by Yahoo Finance. While beating expectations on revenue, the company did not have the same success with its forecasts on its adjusted EBITDA loss. Analysts had expected a narrower adjusted EBITDA loss of -$324.5 million. The adjusted EBITDA reality was a loss of $509 million.
The CEO gave a good interview on Bloomberg this am. I particularly liked the host’s question (paraphrase): You’re all over the place… Uber Ride Sharing… Uber Eats… Groceries. What is the future of Uber? I like his answer and it speaks to his thoughts on how big the future is for him.
Unless the Delta Variant upends everything, which he admits is hard to quantify.
The UBER Unusual Options Activity didn’t disappoint, it was significant today. A lot of reshuffling going and mainly buying time. The big trade was the sale of A LOT of January upside Calls (60s, 65s, 70s) and buying back the $42 Puts. The customer bought more time by buying 30,000 of the June 2022 $60 Calls and selling 30,000 of the $40 Puts. It appears that they are looking for a big upside move in the stock and see value below $40.
This structure paid them a few dollars to do that trade. That’s a lot of leverage to the upside if it breaks new highs!
UNUSUAL OPTIONS ACTIVITY WMT STOCK
It’s About Time This Stock Got Some Love
Wells Fargo upgraded WMT today with the following comments:
“Our positive view is based on: 1) Normalizing consumer behavior should allow WMT to recapture share lost to conventional grocers during the pandemic. 2) We remain positive on the lower-end consumer despite numerous cross currents.”
To Winning Picks Premium Members that should sound familiar. It looks like the analysts are starting to pay attention to what WMT’s top executives have been saying at recent conferences.
The stock is breaking out of its recent range. Good sign.
There’s also Options Call buying in August today. But, I would definitely like to see the earnings in 2 weeks.
One last point, it’s rare to see WMT up and TGT down. Frankly, it’s rare to see TGT down! Take a look at that TGT chart. Wow! Anyways, at some point the big guys pare down a position that is up like that. Where might the TGT-dollars go? Why not WMT?
UNUSUAL OPTIONS ACTIVITY LVS STOCK
You Don’t Have to Like the Stock to like the Options
The casinos have had a rough time to-date. MGM numbers today were ok and that lifted the space... even LVS! The lingering Delta situation is really all that matters for these casinos. And for LVS, add China’s willingness to open up Macau.
>>> Watch our recent take on the casinos here
But, we don’t focus entirely on direction at OptionsGeek. If you’re a Member, then you know it’s more about risk-reward. Another way to say it… There’s a Price for everything. Take a look at this chart:
That is some heckuva a move! Is it warranted. Yes! Their business is in China. And China is not really open for business.
But… at some price … it might be worth a shot.
And it seems like someone is taking it.
Today, a buyer came in to buy 9k October $40-50 Call Spreads for around $2.50. That offers him 3 to 1 on his money over the next 4 months. Not terrible!
You may hate the stock, but that risk reward doesn’t look that bad.
Now go make some money!
Best,
Felix
THIS IS HOW THE TOP 1% TRADE OPTIONS
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THIS IS HOW THE TOP 1% TRADE OPTIONS
The Most Controversial Options Video that the Experts Don't Want You to See!
Voted Top Presenter at the Benzinga Options Conference
