Digital asset mining services company Core Scientific (CORZ) is up 248% over the past year, and shares are near their 52-week highs. One trader sees further gains in the days ahead.
That’s based on the October 11 $13 calls. With 16 days until expiration, 9,989 contracts traded compared to a prior open interest of 129, for a 77-fold rise in volume on the trade. The buyer of the calls paid $0.55 to make the bullish bet.
Core Scientific shares recently traded for about $12.50, meaning shares would need to rise by $0.50, or just 4%, for the option to move in-the-money. The strike price is just above the stock’s 52-week high of $12.72.
The digital asset miner trades closely in-line with moves in the cryptocurrency market, particularly bitcoin. Revenues are up 11% over the past year, and Core shares trade at 10 times forward earnings.
Action to take: Crypto prices tend to fare well in October, even as other assets, such as stocks, tend to have a more mixed record. That suggests that crypto-related stocks could be ready to trend higher over the coming weeks.
Investors interested in the crypto space could be pleasantly surprised after the lackluster trading in the space over the past few months.
For traders, the October $11 calls are inexpensive enough to see high double-digit gains on a crypto rally. Less aggressive traders may want to look at options with more time left until expiration, to get the full potential benefit of a crypto rally in October.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.