Unusual Options Activity in AAPL, EBAY stock and AMC

November 30, 2021

SPY Chart - Options Activity 113021

Lots of information to take in today.

The Omicron comment overnight by Moderna seems a little self-serving.

The more aggressive tone in Powell's comments might give portfolio managers something to think about. These were the highlights:

  • *POWELL: TIME TO RETIRE THE WORD TRANSITORY REGARDING INFLATION
  • *POWELL: THREAT OF PERSISTENTLY HIGHER INFLATION HAS GROWN
  • Now what?

    December 1st is tomorrow. The first of the month is usually a good day for stocks.

    The SPY levels to watch are $453 and $465.

    Everything else in the middle is just noise.

    UNUSUAL OPTIONS ACTIVITY

    1. It’s More Than Just the Sneakers

    2. How Much is Every $10 in AAPL Worth?

    3. Only One Thing Matters in AMC

    Find your own ideas with the Unusual Options Activity Scanner

    Let’s get started...


    UNUSUAL OPTIONS ACTIVITY EBAY STOCK

    It’s More Than Just the Sneakers

    Most people don’t know that EBAY is the largest seller of sneakers. And selling Sneakers is big business.

    EBAY has over 1.9million pairs available to buy each day.

    With so many fakes out there, authenticity verification is a must in this market. In fact, over the last several years, authenticity has become a focus of the whole EBAY experience. Yesterday, EBAY bought Sneaker Con’s authentication business for an undisclosed amount.

    Here’s a good take as to why EBAY wants to dominate this space:

    “Many buyers and sellers preferred to shop sneakers through eBay as they’d be able to see photos of the exact shoes they’d be getting, instead of stock photos, and there were fewer fees compared with some rival sneaker marketplaces. Attracting this kind of buyer is also part of eBay’s larger strategy to drive enthusiasts to its site across various high-end categories, like handbags, watches, and sneakers, then benefit as they shop more items on eBay. The company recently noted the average sneaker buyer on eBay spends approximately $2,000 in other categories, for example.”

    If you win at sneakers, you gain a very valuable customer that buys more luxury goods.

    What Does the EBAY Stock Chart Say?

    EBAY Chart - Options Activity 113021

    EBAY stock is down more than 7% since the announcement although most of the reason is likely related to Omicron’s presence and Powell’s talk. Either way, the 8-month uptrend channel has been broken.

    EBAY is below the 50dma and quickly approaching the 200dma near $57.

    $58 is also an important level.  It was the start of the sharp move higher in August and the support in October.

    Bulls want to see volume buyers here to support the 200dma.

    The options flows is mainly one-way today.

    Options Activity in EBAY Stock

    Unusual Options Activity Scanner EBAY 113021

    The unusual options activity in EBAY is concentrated in the front-week options. Specifically, the EBAY December 3rd $67.50 and $68 Puts were bought right when Powell made his comments regarding tapering. The stock has been under pressure since.

    The RR$ is around $65.50, which would make a Target Stock Price near $64ish.

    EBAY does not report until February.

    While EBAY is feeling the pressure this week, the Sneaker business along with watches, handbags, and collectibles is something to keep an eye on. These areas have done very well for them.

    EBAY can be a huge winner if they replicate that success across other verticals.

    Time will tell.


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    UNUSUAL OPTIONS ACTIVITY AAPL STOCK

    How Much is Every $10 in AAPL Worth?

    Unusual Options Activity AAPL 113021

    FB’s recent announcement on the Metaverse has created a lot of buzz, although most people are still trying to figure out what it is or might become.

    Yes, we’re in the early innings.

    But AAPL is likely to be a big player in whatever the outcome might be. Included in the Metaverse will be augmented reality, which will likely need some form of headset or eyeglass wear.

    This weekend, rumors of an AAPL headset introduced as early as next June popped up.

    And next to the crazy-looking headsets FB is showcasing, this potential AAPL product looks great.

    What Does the AAPL Stock Chart Say?

    AAPL Chart - Options Activity 113021

    AAPL stock continues to impress.

    Friday’s move tried to break the support line. It held and has traded up 6% in the last 2 trading days.

    AAPL made its latest move in November on significant volume.

    It is firmly above the 50 and 200dma.

    There is not much to dislike about that chart.

    The Bears will likely attempt a short under $157, only if they see good volume.

    Options Activity in AAPL Stock

    Unusual Options Activity Scanner AAPL 113021

    Calls are dominating the options flow. They lead Puts on a 3-1 ratio. Incredibly, more than 1.2mm options have traded in this week’s options by midday.

    While there is a lot of back-and-forth trading, I see many Call Spreads coming through. Specifically, the AAPL December 17th $160-$170 Call Spreads have traded almost 20,000x at ~$4.20.

    AAPL is heading full speed ahead with innovation. Augmented Reality is just the tip of the iceberg. There are other avenues like Health Insurance, Autonomous Driving, and whatever the Metaverse becomes.

    That said, valuation always becomes a concern. Remember, every $10 in AAPL is now over $160 Billion dollars in market capitalization.

    Take a moment to think about that.

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    UNUSUAL OPTIONS ACTIVITY AMC STOCK

    Only One Thing Matters in AMC

    AMC Unusual Options Activity 082521

    Box office numbers were disappointing during the 4-day Thanksgiving weekend.

    AMC is taking it on the chin.

    But for now, this really isn’t a fundamental story. We shouldn’t pretend it is.

    It’s a simply a game of chicken.

    The WallStreetBets crowd is the main holder of this stock.

    The only question is… Will they sell?

    What Does the AMC Stock Chart Say?

    AMC Chart - Options Activity 113021

    There are two main bearish technical points.

    First, the AMC flag is having a bit of trouble here and looks like the bottom of the flag might have broken. If we use the $28 low of August, then there still might be some room.

    Second, the stock is under the 50dma.

    The Bullish point is simple - there is a lack of volume. This means that the WallStreetBets crowd is hanging in there.

    Look at the volume back in May-June. Billions of shares traded.

    Volume will be the tell here.

    Bulls do not want to see big volume on a big down day.

    Options Activity in AMC Stock

    Unusual Options Activity Scanner AMC 113021

    There is a lot of positioning going on in front-week AMC options. The AMC December 3rd $37 and the $40 Calls are active, and there is even the rare put buyer showing up in the $33 Puts.

    But the most interesting trade that I see in AMC is the 15,000 AMC January 21st $145 Calls trading at ~$0.74. Yes, the $145 Calls that are 326% higher than AMC’s current price are trading at 2% of the stock price.

    You know what that tells me…

    Never say never!

    The only way AMC goes down is if the WallStreetBets crowd sells.

    I don’t see the volume, so I must ask:

     Are they setting up another trap for the shorties?

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    Best,
    Felix

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