SKLZ, ATVI, RBLX Unusual Options Activity

August 8, 2021

The Good, the Bad, & the Downright Ugly!

I thought we’d focus on the gaming stocks today, including RBLX Unusual Options Activity. There are several issues in the background of these gaming stocks that include:

#1.  China – Can we count on any growth there?

#2.  Pandemic / Reopening – How much of a long-lasting effect on growth is this?

#3.  Industry changes – Streaming games is the future, which means CONTENT is valuable.

In general, I think you have to own the content players for the long-term as MSFT, NFLX and likely several others will get into the platform business. I doubt the Big 3 (ATVI, EA, TTWO) will be independent in 5 years.

UNUSUAL OPTIONS ACTIVITY

#1. Good Level to Get Active in This Stock.

#2. Bad Chart, Bad Situation But Good Earnings

#3. Just Ugly! If You Think it Can’t Go Lower, Think Again

Let’s get started…


UNUSUAL OPTIONS ACTIVITY RBLX

Good Level to Get Active in This Stock.

RBLX earnings are coming up soon on 8/16. The chart is interesting…

RBLX Stock Chart 080421

Recall only a couple a months ago, there were big call buyers in the $100 to $115 strikes thinking the stock would shoot up to $110 to $130. What a difference 2 months makes in these high volatile names! Now, we’re at $75, a pivotal level in the stock. 

RBLX Unusual Options Activity 080421

So, it shouldn’t surprise you that RBLX Unusual Options Activity in the Calls appeared in the August options at the open. I would focus on the 8/20th options to get the earnings.

The RBLX August 20th $84 to $100 Calls are active. 


UNUSUAL OPTIONS ACTIVITY ATVI

Bad Chart, Bad Situation But Nice Earnings

ATVI earnings came out and the numbers were very good. Call buyers into the announcement are out selling their Calls today. The transcript is worth a read to catch up. Here’s Daniel Alegre, President and COO:

Looking forward, we continue to transform our franchise portfolio through faster delivery of compelling premium content, more robust in-game operations, expanding to mobile, and accelerating new engagement models, including free-to-play and advertising.

ATVI’s (big) problem is this sexual harassment lawsuit. It’s a black cloud over the company and has crushed the stock. They are saying the right things and need to fire the right people, which is apparently what they’re doing. A step in the right direction, but… the chart is ugly!

ATVI Stock Chart 080421

But now’s the time to think about where this company is in 1 year. Will they have cleaned house? Do they change the culture and set the example for the industry as the CEO states in his opening remarks? 

We don’t know. And that’s what creates opportunity. 

ATVI Unusual Options Activity 080421

I would avoid the stock and look at ATVI January 2023 Call Spreads. You can get close to 10 to 1. Then, set your alarm for August 4th, 2022. You could make a decision on what you might want to do for the next 6 months until expiry.


UNUSUAL OPTIONS ACTIVITY SKLZ

Just Ugly! And If You Think it Can’t Go Lower… Think Again

SKLZ earnings yesterday didn’t match the dreams. Here’s the investor letter. The stock has taken a beaten. It wasn’t long ago (July 7) that we highlight the SKLZ September $17.50 Put buyer. Stock was $18 at the time, already $4 off the $22 high in late June. It’s now trading $12.50!!!

>>> Watch that SKLZ clip here

SKLZ Stock Chart 080421

And they are still loading up on Puts!

SKLZ Unusual Options Activity 080421

It looks like they are rolling out from the Aug 6th $13 Puts to buy 10k Oct 15th $10 Puts AND selling 10k Oct 15th $17.50 Call. It looks like they paid $0.15 in the October structure. Where does he think it’s going… how about $8?

>>> CLICK HERE for a Bulls vs. Bears refresher on SKLZ

Now go make some money!

Best,
Felix

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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

Options Trading Tutorial - The Greeks Don't Matter

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