Unusual Options Activity in BYND, V stock and DIS

November 11, 2021

Unusual Options Activity Hedge Fund Letter 111121

I think this is a good read.

Russell Clark fought a long battle against the Fed.

He’s raising the white flag.

This game can be humbling.

But I think it’s important to remember that the scorecard (your P/L) doesn’t always have to reflect your level of intelligence.

Bubble Markets have a way of making the MOST intelligent people look foolish.

Here’s the TOP 3…


1. A Lesson From Beyond

2. Ugly Chart in a Bad Industry?

3. I’m Comfortable Buying DIS at THIS Level

Find your own ideas with the Unusual Options Activity Scanner

Let’s get started...


A Lesson From Beyond

Unusual Options Activity BYND 111121

It may seem rudimentary to state the obvious that being a growth company is about showing consistent growth.

If you show higher and higher growth in revenues and/or earnings, then Wall Street will reward you as the “fast money’ investors jump onboard to ride the wave.

As we’ve seen, the wave can be huge! The problem is that it can’t last forever.

So, the minute you miss the targets set by the “fast money” crowd, they flee almost immediately.

And if they get a whiff that you might miss the targets before releasing earnings they probably sell the stock and then go short.

So, it’s not a good thing to hear Maple Leaf Foods CEO Michael McCain, who told investors last week that the company is seeing a “marked slowdown.” Just listen to JP Morgan’s analyst:

“We are not yet sure who is right — Beyond Meat or Maple Leaf Foods — but when we hear commentary like this, it’s hard to be completely confident about the future of the category.”

Here’s Credit Suisse analyst:

“We view the results as further evidence that Beyond’s business is reaching market saturation faster than expected and that the company has deeper problems that won’t be easy to fix.”

Not a great endorsement.

Here’s the BYND chart.

What Does the BYND Stock Chart Say?

BYND Chart - Options Activity 111121

If you are new to investing, I think this is an interesting chart.

The absolute top in the chart was the day BYND partnered with Pepsico.

1 month later, they signed with MCD. You can see another gasp higher.

These events were what every BYND bull was waiting for because it would prove that BYND had finally made it!

Yet the stock has crashed since. Why?

Because these “Deals” or “Partnerships” were the “Fantasy” or the “Dream.”
Once the Dream becomes a Reality, the market starts to focus on the company and the numbers.

25x sales is hard to swallow for any investor looking at numbers.

Don’t forget this lesson.

By definition, it applies to every stock in the ARKK fund.

You are thinking: But what about TSLA????

Musk is a genius.

He has a new fantasy every 18 months, which is ok.

Until it is not.

That doesn’t mean the stock can’t go to $3,000. It simply means that you must assess whether each new fantasy can eventually become a reality.

If it can, then it is warranted. Look at AMZN!

Options Activity in BYND Stock

Unusual Options Activity Scanner BYND 111121

There had been significant unusual options activity in BYND Calls going into earnings. Those calls are getting hurt today. Not only is the stock down, but the IV Crush has been brutal.

I want to point out what I’ll call the “Morning IV Crush.”

Look at the BYND November 12th $80 Puts. 9,000 have traded today, most of them bought in the morning.

With the stock trading $82, these Puts were $1.70.

The stock is now $82, those same Puts are $0.77, down 55%.

This is why it’s important to understand what is IV Crush. Again, it’s more important to understand how to avoid it.

Look, BYND does seem to have positive developments in the pipeline, most notably the launch of their MCD partnership. However, it will need to prove to the big long-term investors that the growth numbers going forward warrant the current stock price.

We’ll see.

Unusual Options Activity - Ultimate Guide


Ugly Chart in a Bad Industry?

Unusual Options Activity V 111121

What is wrong with the payment sector?

Mastercard CEO was on Cramer the other night and said this:

“I’ll just give you one stat: 20% of the top markets around the world, from a cross-border perspective, are currently at 70% pre-pandemic volume. That’s 30% upside… Then you take the U.S., U.K., and Canada, which are the largest markets where the borders only just opened this week, they’re at 50%. That’s all upside because people will go out and travel.”

It did give the stock a boost.

Maybe Visa’s CEO needs to come out and say something (anything!) similar because the stock seems to be hanging on a thread.

What Does the V Stock Chart Say?

V Chart - Options Activity 111121

V stock is below the 50 and 200dma, with the 50 crossing the 200dma. Not a healthy sign.

The stock had a dead cat bounce off the recent $207 low.

The Bulls need a push back through $225 to feel safe.

The Bears are going to lean on it until the stock can prove it belongs here.

Volume is significant over the last few weeks.

Using an ABCD pattern, $193 is not out of the question, although it probably needs help from the overall market.

Options Activity in V Stock

Unusual Options Activity Scanner V 111121

There’s bullish options flow in V today as the stock is getting drilled. Call options are active in the weeklies and in December.

Specifically, the V December 17th $225 Calls were bought this morning as the stock hit the lows. Playing a bounce back?

It’s odd to see retail doing well and the payment industry getting sold. This V call buying seems like a seller of the stock is doing this “just in case” it goes back up.

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I’m Comfortable Buying DIS at THIS Level

DIS whiffed yesterday pretty bad. They missed earnings, revenues, Disney+ subscriptions, etc. On the conference call, CEO Chapek admitted that Disney+ “hit some headwinds.”

Again, not what you want to hear from the CEO when talking about the one segment that has the stock this high. (See BYND idea up top).

Back in early October, I highlighted the “worry” coming through from the options activity.

The DIS chart needs help now.

What Does the DIS Stock Chart Say?

DIS Chart - Options Activity 111121

DIS stock is up here because of Disney+.

The company reinvented itself very quickly as the theme park business and movies imploded due to the pandemic.

Without everything going back to normal, it’s clear DIS stock has a lot riding on the growth numbers from their at-home TV platform.

The stock broke $170 today and I said in October it can quickly move toward $155. DIS stock got close today.

There is big volume coming through this morning, which means the stock is losing some sponsorship.

The Bulls need a quick recapture of that $170 level, or the Bears are going to pile on.

Options Activity in DIS Stock

Unusual Options Activity Scanner DIS 111121

The Call buyers coming into these earnings are getting hurt today with the move down in the stock and with IV Crush after earnings.

Most upside calls are for sale today as this move below $170 and the CEO’s lukewarm comments make it unlikely for the stock to gain momentum in the near-term.

DIS is a “show me” stock now. The next earnings report better be good.

But there is some “positives” out there today.

Someone sold 15,000 DIS January 21st $145 Puts at around $2.26. This means they would feel very happy to buy 1.5 million shares at $145 and take in $3.39 million in premium today to wait around.

I know, $145 doesn’t give you the “warm and fuzzies”… but it’s something.

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Now go make some money!



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