Unusual Options Activity in TIGR, OXY stock and JPM

September 27, 2021

So, suddenly China is super concerned about the environment?

Ok.

And now AAPL and TSLA factories are shut down? Oh, just 5 days. 

Right.

Look, over the last couple of months, there’s been a thought in the back of every investor’s mind: 

"Will China come after U.S. companies, too?"

Well, I think today’s news is the beginning of that.

Which is a better headline:

“China stops AAPL & TSLA production to curb western influence on its people”

or

“China invigorates their focus on lowering emissions to save the world” 

I know, there’s this hope that everything will be ok. I have hope, too. But today’s news makes me pause.

We are in a dangerous spot.

You see, the worst feeling in chess is the moment you realize that you lost the game.

A close second is NOT the moment you realize that you made a huge error that is likely to cost you the game.

It’s the moment you realize that your opponent knows you made a huge error that is likely to cost you the game.

And how do you know when that happens (since chess games are played in silence)?

Every move your opponent makes is deliberate and points to that conclusion.

China knows.

UNUSUAL OPTIONS ACTIVITY

1. Oil Prices Up Can Make THIS Stock Explode!

2. Sorry, No More Trading Allowed… What?!

3. Yield Curve Up Means These Stocks Go Up

Let’s get started...


UNUSUAL OPTIONS ACTIVITY OXY STOCK

Oil Prices Up Can Make THIS Stock Explode!

Unusual Options Activity OXY 092721

Goldman has been bullish on oil prices over the last year. Today, they upped their year-end prices to $90 on Brent crude: 

"While we have long held a bullish oil view, the current global supply-demand deficit is larger than we expected, with the recovery in global demand from the Delta impact even faster than our above-consensus forecast and with global supply remaining short of our below consensus forecasts,"

This has been a Winning Picks Premium favorite for a while. The risk-reward her has been silly at times. Frankly, it’s still kinda silly. 

Yes, they have a ton of debt and there was talk of bankruptcy last year.

But Oil was trading wayyyyyy lower. Remember, futures went through $0!

Now, oil is screaming.

And while a lot of debt is bad for your company when the price of the product you sell is getting killed, it gives you massive leverage when prices are screaming higher.

What Does the OXY Stock Chart Say?

OXY Chart - Options Activity 092721

OXY stock has been stuck between $22 and $33 for most of the year.

I suspect if oil makes a run into the end of the year, OXY breaks through $33 and starts marching its way towards $40+.

Or, China kills the world economy, oil gets crushed, and we have bigger problems.

Options Activity in OXY Stock

Unusual Options Activity Scanner OXY 092721

As I noted here, there’s been unusual options activity in the upside OXY call options. The option flows continue to move in that direction. 

Two weeks ago, they were targeting the November $31 Calls. Last week, they sold some October $30 Calls because, well, it’s not going to go up 20% in 15 days, right?

It looks like they had a change of heart.

Today, they are buying back those OXY October $30 Calls and the $32 Calls.

We’ll learn more on the earnings announcement in the first week of November.



UNUSUAL OPTIONS ACTIVITY TIGR STOCK

Sorry, No More Trading Allowed… What?!

Unusual Options Activity TIGR 092721

I think we should probably expect something like that to come over the wires soon.

TIGR is an online Chinese brokerage app, the “Robinhood of China.” 

When Robinhood was in the we-are-going-to-do-an-ipo phase, TIGR was in fantasy mode. It was easy to get lost in the easy math of people in China x % owners of brokerage accounts.

As we know, the Chinese government crackdown has put a dent in most things China. 

TIGR seems to be right in the middle of that tornado – the TIGR app offers leverage and  occupies brain power that could be used for the State. Probably, the two things China wants its people to avoid.

Evergrande and the losses felt by the Chinese people (financial products and property losses) also probably decreases the demand for trading.

The chart says it all.

What Does the TIGR Stock Chart Say?

TIGR Chart - Options Activity 092721

The TIGR stock chart looks weak, even their app would tell you that.

It reached 2 peaks over the last year on the comparisons with Robinhood and the news of the IPO. Each time, the stock was sold off very hard.

It’s currently under both the 50dma and the 200dma.

$14 seems to be a pivotal level in the stock and it is firmly below that.

The lower target would be the December lows, around $5.50.

Today, the options flow is negative.

Options Activity in TIGR Stock

Unusual Options Activity Scanner TIGR 092721

I'm seeing unusual options activity in TIGR December downside puts this morning. Specifically, there were buyers of 4k TIGR December $10 Puts for $1.60 and buyers of 8,000 TIGR December $7.50 Puts at $0.65. 

The Risk-Reward Breakeven price is pointing to the $5-6 range, which just happens to be where this fairy tale started.



UNUSUAL OPTIONS ACTIVITY JPM STOCK

Yield Curve Up Means These Stocks Go Up

Unusual Options Activity JPM 092721

Yes, the Banks! And they went after them very quickly, maybe too quickly?

Look, there’s a lot going on inside a bank. But at the end of the day, banks make most of their money by borrowing money in the near-term and lending it long-term. This means when the yield curve shifts higher, expect earnings to explode.

A bank’s biggest risk is defaults, meaning they need to get back that money with time. But the consumer and corporations are supposedly in good shape. At least, that’s what Jamie Dimon said in April.  

“What happened is, the consumer has so much money, they’re paying down their credit card loans, which is good. Their balance sheet is in excellent, outstanding shape – coiled, ready to go and they’re starting to spend money. Consumers have $2 trillion in more cash in their checking accounts than they had before Covid.”

$2 Trillion!

So, the banks are nowhere near trouble.. yet! 

The risk is if China crashes the market and corporate defaults tick up, jobs are lost… you get the drift. But who cares about that when the chart looks fantastic!

What Does the JPM Stock Chart Say?

JPM Chart - Options Activity 092721

JPM stock is doing everything according to the book of bullish stocks.

It made a huge move early in the year and has held this $145 - $167 range for 6 months.

Notice how the 50 and 200dma has converged nicely back together. Textbook!

After breaking the 50dma, last week it shot right back up.

JPM stock is now facing that last task – break through the highs. If it does that, I expect to see a move close to $190 ($22 range + $167 = $189). Obviously, this needs a cooperating market.

Options Activity in JPM Stock

Unusual Options Activity Scanner JPM 092721

There’s some unusual options activity in the November 5th expiration. Earnings are due out in mid-October. 

A buyer jumped in and bought 10,000 JPM November $180 Calls for about $0.80.

Try throwing a Target Stock Price in there to see what it would take to get the pointer to land on $180. Then check that chart out again.

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Best,
Felix

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