What’s up fellow scallywag’s, it’s ya boy Swaggy with an update on some unusual options activity caught at the end of last week. Earnings SZN is upon us and the time is now to bring forth our degeneracy into the markets. I’ll go through some of the volume I caught as well as unusual activity.
AMD – Advanced Micro Devices
AMD caught some momentum Thursday as the stock surged nearly 8%. Big-time call flow came through expecting the stock to be trading at about $60 by mid August. There’s been an uptick in the semi’s as whole (NVDA, MU, INTC) as they are forecasting solid earnings throughout the pandemic as the world goes deeper into the digital rabbit-hole.
DKNG – DraftKings
Draftkings stock price has taken a beating over the last couple weeks after reaching all-time-highs earlier in the month. I caught some call buying in August expiration as well as some leaps 2021 leaps. The stock is at short-term lows, looks like the players are expecting a bounce and the DraftKings brand to develop into one of the strongest in the SportsGambling sector.
KO – Coca Cola
Big call buying in Coca Cola (KO) on Friday. 3,700 (900 OI) call contracts for July expiration and a premium paid of $550k. Another trade was in September contracts at the $47 strike price, 7.5k contract for a premium of just under $1 million. Pretty high volume for KO which typically doesn’t have a lot of option flow. Pepsi Co is reporting earnings tomorrow, looks like this could be a proxy play on Pepsi where KO tries to ride some of the momentum.
INTC – Intel Corporation
I caught some interesting activity in INTC on Friday. This play is expecting INTC to report strong and have a good showing into the fall. Here are the two plays I caught. A player purchased a long CALL option at $60 strike and sold the CALL at the $65 strike price, essentially opening a bull debit spread. They then sold PUTS at the $52.5 strike (currently 10% OTM) for a credit of $1.3 million. The exact same play was recognized with another 10k contracts at the same strikes and expiration (October 2020). It’s possible this was all one player, or possible two firms mimicking the first play as the strikes/expiration/volume are all very similar. The players are betting that the stock will stay ABOVE $62 by October, but if the stock price stays anywhere above $52.50-$60 range their losses are limited.
The Banks (JPM, BAC, C)
Didn’t spot anything quite unusual with the banks, other than heavy volume going to earnings (I believe all are reporting Tues-Thurs this week). Looks like most of the volume was predominately bullish sentiment, however, in reality it is quite balanced on both sides. The banks have been getting absolutely hammered throughout the Pandemic and haven’t seen much recovery. This is mainly due to new fiscal policies being introduced that look like they are here to stay. Have the banks bottomed? We’ll find out this week.