Unusual Option Flow Summary Week of August 3rd – ADBE, CNK, FB, MSFT, SDC, SNAP, V

ADBE – Adobe

Saw a bullish position in ADBE being opened with a debit spread. My scanner missed the long leg being opened, but I managed to catch the play by digging deeper. I’ve added the OI from Yahoo Finance so you can see the contracts. Stock is currently sitting at $450 after Friday’s -3% move. The debit spread was in October’s $450 strike (long leg) and sold the $490 strike (short leg). Earnings aren’t until September 15.

CNK – Cinemark

A bit of an unusual ticker for unusual activity. Cinemark saw some pretty heavy call buying on Friday. The stock has been on a bit of a run recently. One player bought calls 80% OTM for the $20 strike (stock is currently $11). This play was only $55k, but highly suspect with how far out the money they went. The play has an expiration date for September 18. I’ve attached Yahoo Finance option chain for August 21 so you can see the heavy volume in the near OTM strikes. This stock typically does not have high volume with options.

FB – Facebook

Facebook had a huge melt up Thursday and Friday. Volume on option activity was well above the average for the last 2 weeks. Saw a good amount of CALL buying with some CALL selling far OTM as well. Most of the call selling (potentially covered calls?) were done with expirations in the next 1-3 weeks. The call buying had expirations toward the end of the year and even into 2021. Long-term bullish.

MSFT – MicroTok

Microsoft saw a massive bullish debit spread opened in November 2020 calls. 75,000 CALL contracts bought with the $220 strike while selling 75,000 CALL contracts at the $240 strike. Looks like the player/fund is expecting upside, but wanted to limit their downside by opening a spread. They have a max risk of $49 million with a max reward of $150 million if MSFT closes above $240 by November.

SDC – Smile Direct Club

Another unusual ticker, this stock saw some unusual call buying recently. Two trades in particular were for next week’s earnings report (August 12). Both trades are for $9 strike, which is currently in-the-money. When the trades were initiated the stock was trading at $8.82. Judging from the OI it looks like of the 16k contracts traded, only 10k are left on the Open Interest. He may have sold part of his position to collect profit, but left a lot on the table for next week.

Snap – Snapchat

Snap saw extremely high volume of call options traded relative to it’s average. Bullish flow out-weighed bearish flow by 3.5 to 1. Could be potential TikTok play as they expect the ban to increase their own share. There’s was a lot of flow to go through on this ticker, so I’m only mentioning that flow in general was above the average here and also more on the bullish side.

V – Visa

Visa saw some unusual option flow last week on Wednesday. That day alone the stock gapped up 2% and closed another 3% higher. Stock is currently trading at $196 and most of the call blocks had strikes of $202.5-$205. Visa generally does not have that much volume on option flow so it’s always interesting to keep an eye on. If you look at the price action of the stock is has been in range-bound trading in the $190-$200 channel for almost 3 months now. Hit’s $200 and drops back down to $190, then touches $190 and makes it’s way back up to $200. Maybe some flow rolling through will be enough to have it break out.

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