Unusual Options Activity in FB stock, CCJ and AAL

December 2, 2021

Unusual Options Activity Faangma 120221

This is a good article with some great charts.

My favorite is this one above.

The returns of 494 stocks in the SP500 vs. the top 6 since 2008.


Don’t get too sucked into the negative vibe there. Albert Edwards has been calling for a crash for a long time.

It’s definitely a risk, I’m just not there yet. But that chart!


1. Is Uranium Ready For Another Run?

2. Risk is Rising For THIS Stock

3. What Do You Do Here With AAL?

Find your own ideas with the Unusual Options Activity Scanner

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Is Uranium Ready For Another Run?

UOA Trade Idea CCJ 090221

We’ve been all over this CCJ for some time now, bullish HERE, and cautious HERE.

And if you don’t understand the story, THIS is a great write-up describing the opportunity.
Since we were long in Winning Picks Premium on the run-up, I have one eye on this pullback.

What Does the CCJ Stock Chart Say?

CCJ Chart - Options Activity 120221

While CLF stock is down significantly over the last few weeks, the bullish trend continues.

There are some chinks in the armor, though.

First, it’s lost the 50dma. And second, that 50dma is quite far from the 200dma, which means the stock could be range bound until this spread narrows. 

Lastly, sharp moves like these do a lot of damage and usually take a little time to turn around.
The options market is seeing some big volumes by the main player in the name.

Options Activity in CCJ Stock

Unusual Options Activity Scanner CCJ 120221

There’s unusual options activity in CCJ March options. Recall, the big player in this name had large Call positions mainly in December. He has been a seller of those calls over the last couple of weeks.

Today, he is adjusting some risk-reward by moving down his strikes. Specifically, he is selling to close the CCJ March $33 and $34 Calls to buy the CCJ March $30 Calls. The $30 Calls have an RR$ of $37.26, which feels rather higher.

But if there is a uranium squeeze…

 What do you think?

Unusual Options Activity - Ultimate Guide


Risk is Rising For THIS Stock

Unusual Options Activity FB 120221

The Metaverse is everywhere now. FB will spend tens of billions of dollars trying to make it work, so you have no choice but to try and understand it.

The real question is how long will it take FB to create something exciting?

In the meantime, FB will still rely on ad revenue.

Today, UBS initiated coverage on FB with a Buy saying:

“We see the Street’s ad revenue estimates as too low in 2022, and we model GAAP EPS at 5% above consensus in our base case and 21% above in our upside case predicated on Reels, Shops or Watch alone scaling.”

The ad numbers might look low but maybe they should?

Consider the supply chain issues faced by the advertisers. We learned recently that large retailers were pulling back because they had less product to sell.

This chart doesn’t look healthy.

What Does the FB Stock Chart Say?

FB Chart - Options Activity 120221

The FB stock chart looks a lot different than it did when we were looking at it during the podcast days. Back then, the stock had a nice flag formation that was breaking out with big stock volume on up days.

Over the last 6 weeks, I’ve been calling for a digesting period for the stock because of a break in that uptrend.

Fast forward to today and the stock is trading weak. It’s below the 50 and 200 dma as the 50 is about to cross the 200dma. FB is also approaching an important support level near $305.

And if that wasn’t enough, an Elliot Wave pattern is pointing a lot lower.

 First and foremost, the Bulls need a hold at $305. Everything starts there.

Options Activity in FB Stock

Unusual Options Activity Scanner FB 120221

There is a lot of call selling today across all expirations. But I wanted to point out the Put buying in this week’s $305 and $300 Puts.

They know that if the $305 level breaks, FB could cascade lower. You can see the RR$ is $300.35 for the $305 Puts and $296.10 for the $300 Puts.

I am concerned about FB. The Metaverse transformation for the company will take a lot of time. Zuckerberg has stated something like 2030. They will spend a fortune on building it without seeing much of a return.

All this adds up to a lot of risk for the stock if advertising revenues drop. The market will be forced to look at the numbers and believe the messaging from FB for a very long time.

I suspect next earnings could be a very big event for the company. Stay tuned.

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What Do You Do Here With AAL?

After highlighting a few cruise liners recently, I thought it would be interesting to look at an airline.

For obvious reasons, Omicron did a number on AAL over the last week. With the announcement of the first person in the U.S. yesterday and then the second person today, you could see how hard it may be to own these stocks. Hopefully, they don’t continue these day-by-day announcements.

Take a look at the chart.

What Does the AAL Stock Chart Say?

AAL Chart - Options Activity 120221

AAL stock broke huge support this last week on good volume.

You can see that the big support is near $11. There is likely a stop at $15.

How does it get to $11?

The farther we are away from “normal,” the more money the company will need.

Whether it’s debt or a share offering, it adds increasing pressure on the stock.

But for every seller there is a buyer, right?

Yes, in this case, any buyer here is likely long-term thinking. If you look at February, there was a lot of volume there. Someone may be taking the opportunity to nibble down here on the event that Omicron is a nothing-burger.

Options Activity in AAL Stock

Unusual Options Activity Scanner AAL 120221

Call and Put volumes are even today. While there is a lot of back and forth in the front few weeks, this trade caught my eye.

Someone sold 6,000 AAL March 18th $21 Calls near $1.00. This is only done by a long-term holder. Perhaps, they bought more stock yesterday or today and want to take in a $1 premium to reduce their entry cost.

The airlines and cruise liners cannot stand another lockdown.

(I hope) The U.S. Government knows that they will be on the hook for bailing them out and won’t let that happen. It’s also not good for reelections next year.

That said, scaring people to stay home is not good either unless it really is that dangerous.

And that is the million-dollar question?

I’d rather buy AAL at $21 with that answer, then meddling here guessing at straws.

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