On October 11th, I mentioned SOFI and the upside call buying we were seeing in the name.
You might recall that I mentioned finding another name with “enormous potential”:
SOFI earnings are in early November.
At Winning Picks Premium options alert service, we are long another fintech name with an equally good story, great momentum, less of a following, and enormous potential with earnings in a few weeks. It’s up 70% in 3 days but the expectation is for a 300% move. Get involved!
The ticker is LC. We bought calls for the November earnings announced last night.
They didn’t disappoint and the stock exploded higher this morning.
If you want to understand what a great earnings call sounds like, I suggest that you go check yesterday’s LC earnings call.
Then after that go look at UPST vs LC market cap.
These companies are similar.
And if Wall Street starts looking at LC as a fintech stock, then it has room to run.
Here are today’s Top 3 UOA trades…
UNUSUAL OPTIONS ACTIVITY
1. All That TSLA Money Has to Go Somewhere
2. China Just Made THIS Situation Binary
3. Is PLUG Ready to Do It Again?
Let’s get started...
UNUSUAL OPTIONS ACTIVITY LCID STOCK
All That TSLA Money Has to Go Somewhere
Just last week I mentioned the weekly Call buying in LCID. The front-week options didn’t work well, but this week’s options hit big!
With TSLA exploding higher, it makes sense for the crowd to take some of those winnings and look for the “next big thing.” Why look any further than LCID, which is considered “The Next Tesla”?
But LCID might be better than TSLA here.
TSLA already has earnings. Borrrring.
LCID hasn’t even produced a car yet. Exciting!
The chart says it all.
What Does the LCID Stock Chart Say?
LCID is trying to end the year with a bang.
And you must give it credit, the volume is strong over the last 2 months and especially strong today on the breakout.
The stock has ranged between $17.50 and $30 over the last 7 months. So, $30 is a significant level.
I'm sure the bears are cursing today.
The Call activity is incredible!
Options Activity in LCID Stock
There’s unusual options activity in LCID front-week options… A lot of it! Over 1,100,000 options have traded hands near today’s halfway mark. As you can see, the big volumes are loaded up in every Call strike.
Frankly, it’s staggering.
Implied Volatilities have doubled, indicating that Citadel will attempt to make back some of the money they are probably losing today.
LCID earnings are due on November 15th.
Watch the close. If the stock closes steady near the highs, tomorrow’s open could be up another $10.
You’ve seen this movie before.
UNUSUAL OPTIONS ACTIVITY FUTU STOCK
China Just Made THIS Situation Binary
Sun Tianqi, one of Prime Minister Xi’s henchman and head of the Financial Stability Department of the People's Bank of China (PBOC) made a stinging analogy yesterday:
"Cross-border online brokerages are driving in China without a driver's license. They're conducting illegal financial activities."
You need a license in China to deal with Chinese nationals. But of course you do!
Off-shore brokerages, FUTU and TIGR, are getting hit on the news which indicates a crackdown on their business.
The chart looks all too familiar.
What Does the FUTU Stock Chart Say?
Looks like a version of the “Momentum Mountain” we know.
There is probably over 1Bn shares of FUTU stock that traded from late-December last year to September. This means there are a lot of people stuck averaged above $100.
As you can imagine, unwinding an equal number of shares could hurt.
Charts don’t matter anymore when there’s a China announcement lingering that could put FUTU out of business.
Go look at EDU to remind yourself.
The options flow continues to press the downside.
Options Activity in FUTU Stock
FUTU Put options continue to be active as volatility increased dramatically today.
The FUTU December 17th $40 and $50 Puts have been bought several thousand times each. Look at those Risk-Reward Breakeven Prices… $30.74 and $37.59. To buy those you must be expecting prices near $24-$33. That’s half of today’s stock price!
Earnings are due in late-November. Not sure they really matter.
It’s quite binary from here. If China says the game is over, well the game is over and FUTU becomes the next participant in the “$10 Club.”
Remember, I am on record saying that 90% of these “fantasy” stocks hit $10 before it’s over. Not sure of the timing, but I’ve seen the aftermath of the Nasdaq 2000 Bubble and it will be very clear when it’s “over.”
Until then… party on!
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UNUSUAL OPTIONS ACTIVITY PLUG STOCK
Is PLUG Ready to Do It Again?
The PLUG Symposium two weeks ago was well-received. Morgan Stanley upgraded the stock ahead of the event and it soared.
At the event, PLUG management raised guidance for next year's
earnings revenue numbers and 2025. Now, they are only trading at 27x next year’s sales.
That isn’t cheap. But does it matter?
This market is about momentum at the right time.
PLUG caught the fever. Now it’s trying to do the almost-impossible.
What Does the PLUG Stock Chart Say?
Up and down the “Momentum Mountain” is quite a ride. Doing it twice in a year is reserved for those special stocks. PLUG, like LCID, is looking to be “special.”
The stock is above the 50dma and recaptured the 200dma today.
Volumes have been good over the last month, although they have trickled lower up here.
This $37 level might have some memory here from late-December and again in March-April.
Bulls are in control here, while the bears are likely angry, frustrated and trying to hold on for dear life.
The options flow is significant and one-sided.
Options Activity in PLUG Stock
PLUG call options are outpacing put options 4 to 1. Options expiring tomorrow have traded over 125,000 contracts already.
Weekly call options were busy two weeks ago ahead of the event. You’ll recall that I was skeptical about chasing with leverage. That was the right move as those options didn’t work.
Here we are again. 1-day options.
The buying has caused a bit of a gamma squeeze today.
Just remember, gamma squeezes work both ways. At some point, all these call buyers have to get out. Unless, of course, they will exercise and buy the stock. Stock? What’s that?
Again, I am skeptical of chasing the weekly momentum here.
I am also skeptical of another “Mountain.”
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