Unusual Options Activity in TWTR stock, NFLX and TSLA

January 27, 2022

When I first started on Wall Street, I was a sponge on the trading floor.

I would ask a million questions.

One morning a big trader on the floor was reading the Wall Street Journal.

I asked him, "What sections do you read first?"

"I always start right here," as he pointing to the bond section.

When I asked why, the answer was simple...

Bonds move the market.

So, I had to laugh when I heard Stanley Druckenmiller announce today:

“What I find so exciting about yesterday is if the Fed now behaves as Chairman [Jerome] Powell suggested they will in the months ahead, we can now heed the message of the bond market again no matter what it may be."

Start listening to the bonds.

UNUSUAL OPTIONS ACTIVITY

1. Where’s the Floor in TWTR?

2. Did Ackman Buy the Bottom in NFLX?

3. TSLA Chart Looks Weak. Buy at THIS Level.

Find your own ideas with the Unusual Options Activity Scanner

Let’s get started...


UNUSUAL OPTIONS ACTIVITY TWTR STOCK

Where’s the Floor in TWTR?

Unusual Options Activity TWTR 112921

The big reveal on this quarter’s social media earnings will be advertising spend. Sentiment is very poor. Just last week Barcley’s stated:

"We are increasingly concerned these flagship names (Google, Meta, etc.) may disappoint looking ahead based on the massive penetration gains that digital advertising has realized in the past 18 months."

This would not bode well for TWTR.

But the stock is reflecting that already. The question is…

Is it worse than even these lowered expectations?

What Does the TWTR Stock Chart Say?

TWTR Chart - Options Activity 012722

TWTR stock is down almost 60% from its highs and about 50% in the last 3 months.

It’s hard to recreate another TWTR although the Trump-backed “Truth Social” is going to give it a try.

The stock is firmly below both moving averages and it has some decent resistance above near $40 and $48.

Consider that we are back to July August prices of 2020 now where there were some big volume days.

Bears will press until someone pushes back, and they obviously haven’t for a while.

Put buyers are back in the options market.

Options Activity in TWTR Stock

Unusual Options Activity Scanner TWTR 012722

There’s put activity in February and June. The TWTR February Puts look interesting as someone bought 14,000 TWTR February $33 Puts for $1.92.

The RR$ there is $28.29, or almost 20% lower.

Earnings are due out on February 10th.

At some point, these social media names (TWTR, SNAP, PINS) become interesting to the giants as strategic assets.

 I must imagine they are considering what it would cost them.

Warning Stop Guessing - Options Trading Course

UNUSUAL OPTIONS ACTIVITY NFLX STOCK

Did Ackman Buy the Bottom in NFLX?

Bill Ackman has taken a large stake in the company after the big drop on earnings, he says:

“The opportunity to acquire Netflix at an attractive valuation emerged when investors reacted negatively to the recent quarter’s subscriber growth and management’s short-term guidance,” Ackman said in the letter. “Netflix’s substantial stock price decline was further exacerbated by recent market volatility.”

I like his thinking here with the stock cut in half. But it definitely has some risks as subscriber growth slows down and the cost to acquire customers rises.  

What Does the NFLX Stock Chart Say?

NFLX Chart - Options Activity 012722

After breaking out of that 1-year range and hitting new highs, it’s been straight down for NFLX.

Look at that RSI if you want to see an oversold stock. By itself, that doesn’t mean it will go up. But it does mean people are bailing on the stock.

The MACD is also crushed.

I think your range here is the Covid lows near $290 and the $460 break.

Options Activity in NFLX Stock

Unusual Options Activity Scanner NFLX 012722

The NFLX January 28th $400 Calls is seeing a ton of action today. Buyer stepped in right in the morning trying to catch a big rebound with the Ackman news.

If you were fast enough, these doubled from 9:30am to 10:15am. They then lost 70% in the next 30 minutes as traders tried to sell their Calls.

Along with the Call selling, put buying picked up as well.

If you want to play NFLX with Ackman, I suspect you will need to be a bit more longer-term and definitely need to see another earnings report.

Sign up for the Options Trading Newsletter via email and receive a FREE 7-day Options Course.


Options Trading Tutorial - Why the Greeks Don't Matter

UNUSUAL OPTIONS ACTIVITY TSLA STOCK

TSLA Chart Looks Weak. Buy at THIS Level.

Unusual Options Activity TSLA 010321

TSLA crushed numbers yesterday yet the stock is under pressure as the company offered limited 2022 guidance, a longer ramp for supply-chain issues to clear up, and no new EV introductions this year.

Yesterday, we gave a 1-standard deviation range of $843.50 and $1,056.50. It looks like it is trying to hold that today.

What Does the TSLA Stock Chart Say?

TSLA Chart - Options Activity 012722

There’s a lot to digest in that TSLA chart.
The stock is clearly weak as it breaks the $900 level we’ve been watching.

It trades in the lower range of the channel we spotted.

It’s under the 50dma, which is starting to turn lower.

The RSI is not yet oversold.

The MACD is making a new low with price.

And lastly, volume is nothing to write home about.

The Bulls will try to support the 200dma at $814. But I’d rather wait until the stock gets above $900 to take a stab at buying the upside.

Options Activity in TSLA Stock

Unusual Options Activity Scanner TSLA 012722

TSLA options volume are active in the weeklies. You can see the battle ground form around the 50,000 Call options at the $900 Call strike and 70,000 Put options at the $850 strike.

The RR$ for the puts is $814 and for the calls it’s $927.

Take your pick, but I like how it’s being played considering a possible breakdown and then back above the $9000 level to draw traders back in.

My best guess is that it ends in between and decides to make a move next week.

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

Now go make some money!

Best,
Felix

THIS IS HOW THE TOP 1% TRADE OPTIONS

The Most Controversial Options Video

that the Experts Don't Want You to See!

Voted Top Presenter at the Benzinga Options Conference

Options Trading Tutorial - The Greeks Don't Matter

SEARCH FOR MORE TRADE IDEAS

WHAT YOU MISSED

RECOMMENDED FOR YOU

DISCLAIMER
Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Options involve risks and are not suitable for everyone. Prior to buying or selling options, an investor must receive a copy of Characteristics and Risks of Standardized Options. Copies may be obtained by contacting your broker, The Options Industry Council at One North Wacker Drive, Chicago, IL 60606.

Felix Frey and OptionsGeek, LLC. are not registered as an investment adviser nor a broker/dealer with either the U.S. Securities and Exchange Commission or any state securities regulatory authority. All users of this Content and/or website must determine for themselves what specific investments to make or not to make and are urged to consult with their own independent financial advisors with respect to any investment decision. The viewer bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. All opinions, analysis and information included on this Content and website are based on sources believed to be reliable and written or produced in good faith, but should be independently verified, and no representation or warranty of any kind, express or implied, is made, including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. In addition, Felix Frey and OptionsGeek, LLC. undertake no responsibility to notify such opinions, analysis or information or to keep such opinions, analysis, or information current. Also be aware that owners, employees, writers, or producers of and for OptionsGeek, LLC. may have long or short positions in securities that may be discussed in this Content or website. Felix Frey and OptionsGeek, LLC.and the principals and/or employees of OptionsGeek, LLC. may hold securities of companies mentioned in this Content. Neither Felix Frey nor OptionsGeek, LLC. is receiving any compensation from any company referenced in the Content. Past results are not indicative of future profits.