DIS, MGM, NVDA Unusual Options Activity

August 8, 2021


Don’t Forget This Sector!

Semis are starting to heat up again. AMD is trading well and reaching new highs. I'm seeing NVDA Unusual Options Activity after BofA reiterated NVDA as a Top Pick prior to earnings in 2 weeks. (Keep in mind, Goldman Sachs was positive yesterday on NVDA and AMD)

“Reiterate Buy, but expect mix-related volatility. NVDA remains a top pick ahead of Q2 call post-close Aug-18 and we look for upside to consensus Q2 and Q3 sales outlook.”

NVDA released this yesterday on some of their “AI” initiatives, a buzzword investors seem to like.

NVDA Options Chain

NVDA August options are active again today. It appears the NVDA August 6th 200 & 205 Calls were bought right out of the gate along with +20k of next week’s $205 Calls. To buy those, someone has got to be thinking close to $217. That’s a lot!  Earnings are due the following week.

NVDA Trade Idea - Chart

The chart is interesting. The immediate range is wide at $180 to $210. The MACD has come down with the stock relatively in the same place – that’s good. However, there was some significant technical damage done in mid-July. It would need a strong push and an announcement to race back through the highs prior to earnings. We’ll see.


Viva, Las Vegas!!!

We’ve highlighted an MGM Put buyer over the last couple of weeks. Earnings are due tomorrow. Forbes has a good earnings preview that starts with the following:

“After surpassing pre-Covid levels in June, the shares of MGM Resorts (NYSE: MGM) have observed a slight correction due to continued weakness in Macau, resurgence of infections in the U.S., and a broader downtrend in sports betting stocks. The company’s long-term focus is on expanding its presence in Asia and attaining a sizable market share of the domestic sports betting & iGaming industry. While the strategic direction is likely to result in revenue and earnings growth, the near-term slump in discretionary spending is a drag on the company’s finances.”

Remember what they mean about the company’s finances. They sold their Las Vegas properties and did a lease-back ie. rented the properties. MGM then took the money they received and spent it on growth. With the Delta Variant creeping up on them a shutdown would be catastrophic for them as they are much more leveraged.

Watch this clip on MGM (58.20 Mark)

MGM Unusual Options Activity

The puts remain active ahead of the report. I suspect they are targeting $33-35.

MGM Trade Idea - Chart

$32.50 seems like it would get some immediate support of the stock went down. That said, look at what they’ve done to LVS and WYNN.


You Gotta Love this Company, But What about the Stock?

Disney’s streaming business has been a blessing for the stock. But make no mistake, they need the theme parks opened to generate the cashflow needed to make Disney work. The Delta variant has caused some increasing problems there as news flashes like these hit the airwaves.

That said... this chart below looks vulnerable.

DIS Trade Idea - Chart

There are clearly sellers in the $180 range. A break of the 200dma and this $167.50 would not be a good development.

DIS Unusual Options Activity

With the stock down 2% today, I'm seeing Unusual Options Activity in August. The options are active on both sides of the fence with Puts and Calls. Earnings are next week. I’m looking at the August 20th Put Open Interest to see where the bets are being made. You can see from the New Options Chain, there is decent Open Interest in $155-175 range, while the RR$ range is between $148.82 and $164.82. Be careful here!

Now go make some money!



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The Most Controversial Options Video that the Experts Don't Want You to See!

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