June 11, 2025

Note: This idea was originally shared with Winning Picks Premium Members on June 5th. Nothing has changed in the thesis, except the stock has cooled off a bit for now.

You’ll see that we initiated a diagonal spread to gain exposure in a smart way and position ourselves for a potential retracement... which we got. Now, You have the opportunity to enter the trade at a lower strike ($25 vs $27) but the same price.

As you’ll read below, I’d like you to consider the following adjustment:

On any quick move higher in the coming weeks, consider selling the July 18th $30 calls around $1.00.

This adjustment would:

• Lower the P/L volatility
• Reduce your capital at risk by approximately 40%
• Set you up for another potential call sale into August
• Still allow for 140%+ profit if the stock makes a strong move higher

The trade idea offers a flexible setup with strong upside and better risk management. Let’s stay patient and ready to act on the next bounce.

If you can't do spreads, buy only half of a total position.

June 5, 2025

There’s been rumors that Roaring Kitty, of GameStop fame, is long Unity Software (U) ever since he posted a meme on January 2^nd featuring a clip referencing the late musician Rick James, who had a song called "Unity."

Big Options Flow

Fast forward to last week and those rumors started heating up again.

On May 28^th, someone bought 40,000 U January 16^th $30 Calls in 10,000 lots for $3.25, $3.60, $3.90, and $4.40.

Then on May 30^th, they came back for 20,000 more, buying 10,000 contracts for $5.25 and $5.40.

Upon further digging, it looks like the same buyer who bought:

• 10,000 U Jan 16^th $30 Calls for $2.50 on May 16^th.
• 10,000 U Jan 16^th $25 Calls for $2.50 on May 8^th.
• 10,000 U Sep 19^th $25 Calls for $1.60 on April 8^th.
• 10,000 U Jun 20^th $30 Calls for $0.33 on April 8^th.
• 10,000 U Jan 16^th $25 Calls for $2.50 on April 7^th.
• 10,000 U Jun 20^th $20 Calls for $1.65 on April 7^th.
• 10,000 U Jun 20^th $25 Calls for $0.73 on April 7^th.
• 10,000 U Sep 20^th $20 Calls for $2.70 on April 7^th.

Now, some of these were rolled. But the point is that the flow is substantial, and it certainly feels like Roaring Kitty.

Nevertheless, the meme crowd, many of whom worship Roaring Kitty, jumped in and immediately attacked the weekly options. They’ve been buying the June 20^th $25, $30 and $32 Calls, driving those premiums much higher.

The Unity “Story”

The “story” likely revolves around Unity’s new AI-driven ad business called Vector. According to Unity’s new management team, it showed solid results offering clients much better ROAS (Return On Ad Spend), up to a 15-20% lift. CEO Matthew Bromberg noted in the latest earnings call:

“As all of you know who are following the company. Folks in performance-based advertising do not have fixed budgets. So, they will spend up to the point they hit their ROAS targets. And when we perform better and provide more players and more high-value players, they spend more with us. And so, I would imagine that their customers are moving budgets around all the time. But the point is that, it's not capped. It's not a winner-take-all business. And so, we're really excited about the broad growth we're seeing across the segment.”

In other words, if this new AI-driven ad platform continues to perform well, more revenues will come their way as the business flows to the best platform. Even better, most of it will drop to the bottom line since Unity Software runs on 80% margins.

Another name in this space is AppLovin (APP). Go take a look at that stock.

The Trade

I want to play along conservatively with the direction as well as the high premiums driven by the meme crowd “reaching” a bit.

Earnings are due around August 7^th.

I like the following trade:

Buy 1 U August 15th $27 Calls for $3.20
Sell 1 U June 20th $30 Calls at $0.70
Net-debit = $2.50.

The Target Stock Price is $36. I expect these June $20 Calls to go to $0. Then, when they come for the July options, we can sell them those as we wait for earnings.