Unusual Options Activity in PINS, MU stock and F

October 20, 2021

Paul Tudor Jones

PTJ is a legend.

When he speaks, it's worth a read.

"To me the number one issue facing main street investors is inflation. Inflation is not transitory its here to stay and its probably the single biggest threat to certain financial markets and probably I think to society in general."

Amen, PTJ, Amen.

But don't forget...

Before runaway inflation destroys everything it makes everything look incredible.

Here are today's trades...

UNUSUAL OPTIONS ACTIVITY

1. PINS Deal at $70? Think Higher.

2. THIS Semi Trades Up on a Downgrade. Selling Over?

3. Did this Analyst Just Ring the Bell?

Find your own ideas with the Unusual Options Activity Scanner

Let’s get started...


UNUSUAL OPTIONS ACTIVITY PINS STOCK

PINS Deal at $70? Think Higher.

Unusual Options Activity PINS 102021

Bloomberg came out with a report that PayPal was interested in buying PINS at $70 per share. 

This would value PINS at $39Bn. 

Reuters added this:

"News of the potential deal comes less than a week after Pinterest co-founder Evan Sharp announced plans to leave the company to join LoveFrom, a firm led by Jony Ive, the designer of many iconic Apple products."

I like the news (if it’s true), but I would be very surprised if a bidding war didn’t immediately erupt.

The stock was trading $90 only 6 months ago.

What Does the PINS Stock Chart Say?

PINS Chart - Options Activity 102021

PINS stock has had its ups and downs all year.

This is a name where charts don’t mean anything once there is interest to buy the company.

The value becomes whatever someone is willing to pay for it.

If I am a PINS executive, $100+ has a nice ring to it.

The options flow is believing the story.

Options Activity in PINS Stock

Unusual Options Activity Scanner PINS 102021

As you can imagine, Call option volumes in the near-term options have exploded. In the October 29th expiration, there’s buyers in the $58 and $60 Calls while it seems like better selling in the $65 and $70 Calls.

Also, there is selling of upside calls in the longer expirations.

Notice the IV changes today in the shorter vs longer options. This is the market “believing” that PINS is in play.

PINS is reporting next week.

My 2 cents…

I simply look at the range PINS stock has had over the last year and think that $80-$90 would be a steal here. 

PINS is not your standard company. It’s a strategic pawn in a very large chess game. 

And $50Bn for a company that can’t be replicated is a steal in this market.

I would suspect to hear the names WMT, TGT, AAPL, MSFT, and CRM pop up very soon if this is real.

Lastly, Bloomberg has a good reputation of reporting early on deals… maybe only second to the WSJ. So, you have to give it some credit.


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UNUSUAL OPTIONS ACTIVITY MU STOCK

THIS Semi Trades Up on a Downgrade. Selling Over?

Unusual Options Activity MU 101221

Mizuho downgraded MU on pricing pressure and supply chain issues.

“We are downgrading MU, WDC and QRVO to Neutral. While MU and WDC have been executing well in a tough environment, we see increasing headwinds for 1H22 that limit upside.

Is this analyst too late?

What Does the MU Stock Chart Say?

MU Chart - Options Activity 102021

The stock has been on a steady decline and recently broke that important $70 level last week.

The bears will be leaning on that and the 50dma right above it at $71.50.

The bulls are looking at baby steps here.

First, it’s up on a downgrade which is a positive and sign that the sellers may be exhausted.

Second, the MU bulls want a close back above $70 on good volume.

Options Activity in MU Stock

Unusual Options Activity Scanner MU 102021

The unusual options activity in MU stock is looking for exactly that. There are buyers of the weekly $68, $69, and $70 Calls. 

There was also a buyer of 7k MU October 29th $69 Calls for $1.25. Notice the Risk-Reward Breakeven Price is $71.31. It's right at the 50dma. 

Semis are a mixed bag here. The more sophisticated chips are flying while DRAM is having trouble. 

After such a big move lower, MU is probably a better buy after it takes back the 50dma. Recall, there were large put buyers after the $70 break last week. Let the stock prove itself first.

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UNUSUAL OPTIONS ACTIVITY F STOCK

Did this Analyst Just Ring the Bell?

Unusual Options Activity F 102021

Credit Suisse issued a mea culpa today:

“When we downgraded Ford early last year, our concern was that Ford was struggling in balancing the ‘two clocks’ - near-term execution issues would ultimately limit Ford’s ability to adequately prepare for the long-term transition of the auto industry. Yet in the past year +, we’ve seen a significant turnaround underway at Ford - it has ended its cycle of quarterly earnings disappointments, and its transition to an EV/digital world has sharply accelerated."

F stock has more than doubled in a year. 

I guess better late than never.

What Does the F Stock Chart Say?

F Chart - Options Activity 102021

If you were doing a risk-reward analysis 2 weeks ago, $16-16.50 would have been your top range, and $11.50 the “line in the sand.”

Just because an analyst who blew it last year comes back in now is no reason to start getting excited.

But this tape is bid, bid, bid… so you have to at least think: “breakout?”

The options flow is debating that exact question.

Options Activity in F Stock

Unusual Options Activity Scanner F 102021

This week F $16 Calls have traded 80,000 contracts. They were bought from $0.04 to $0.30. That’s only +600% if you’re keeping score.

The back months are mixed. There’s been some buying in the morning, only to see the Call sellers start creeping in.

F reports on October 27th.

This move feels extended. I’d like to see it settle in the $14 range, hold, and then make a move into the Rivian deal.

But there’s also the possibility that this analyst buys the top after selling the bottom.

Click here if you need more options trading picks with in-depth analysis.

Now go make some money!

Best,
Felix

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