I took a deeper look into the unusual option flow from this week and found a few interesting plays. Let’s take a look, shall we?
AMZN – Amazon Inc
A player opened a $47 million dollar bet, short straddle, in AMZN last week. They sold to open 1,000 of each PUT and CALL September 18 contracts at the $3015 strike price to collect a total of $47 million in premium. The player stays profitable if AMZN stays in between a price range of $2,500-$3,500. The closer AMZN stays at $3,000 price after earnings, the morning money the player will keep. This bet looks like they aren’t expecting earnings to move Amazon that much and are trying to capitalize on the premiums from high volatility at the moment.
BABA – Baba Holdings
Big call buyer in BABA last week. Player opened a $55 million dollar position with 18,000 contracts in August 21 CALLs. BABA had a good run up recently, but has dropped slightly since reaching all-time-highs not long ago. This bet is suggesting the player expects for the stock to have another pop in the short-term.
HUYA – Huya Inc
Another Chinese stock in play was HUYA. This stock doesn’t normally see a whole lot of unusual options activity, so this trade stood out quite a bit. A player purchased 2,500 CALL contracts at 9% OTM with an expiration in October, 2020. This is a pretty directional bet with a high risk factor due to how far OTM the position is. The position is valued at about $600k and they are expecting the stock to rise over the next 3 months.
ESTC – Elastic
Player opened a long position that expires August 21, before the earnings reports for ESTC. ESTC is a cloud/software/SAAS platform, perhaps they are expecting the stock to rise as other tech companies report solid earnings.
HD – Home Depot
Saw some high call volume in HD on Friday. Total value of call positions was about $25 million on Friday where as a typical day for HD option volume is approximately 2-5 million daily. Biggest plays were both for August 21 calls at the 200 and 220 strikes with values of $18 million and $6 million, respectively. HD reports earnings August 18. The player is expecting the stock to have a good run up before earnings as expectations are high for a good quarter.
MAR – Marriott
Marriott has been seeing some bullish flow recently. Some positions that caught my eye were multiple positions of players selling PUTs. These could potentially be another leg of a bigger position, but it seems like the player is expecting MAR to have hit a bottom. As long as MAR stays above $85 (now $91) in the short-term then both players will realize maximum profit from their position.
MRNA – Moderna
Everyone knows the news of the MRNA vaccine. On Friday, players continued to buy into strength expecting the stock to continue it’s rise up over the next several months. $90 million in calls were purchased on Friday, most positions were relatively far OTM, which shows confidence in the bet.