Cryptocurrency brokerage Coinbase (COIN) has soared in recent sessions, rallying 11% on Monday alone. One trader sees further upside through the end of the year.
That’s based on the December 20 $190 calls. With 65 days until expiration, 39,471 contracts traded compared to a prior open interest of 721, for a 55-fold rise in volume on the trade. The buyer of the calls paid $30.99 to make the bullish bet.
Coinbase recently traded for about $200, making these options about $10 in-the-money already. Shares are still well off their 52-week high of $283.48 set in the spring, but have now been trending higher since September.
Shares tend to trade in line with movements in the cryptocurrency market. With this market starting to perk up after a quiet summer, shares may still have some more upside ahead.
Operationally, revenues are up over 108% in the past year, and bigger gains may occur if the crypto market continues along its bullish path.
Action to take: Coinbase shares have a strong positive momentum behind them, and may rally higher in the months ahead. Shares can be quite volatile, so investors may want to build a partial stake now and use any big down days to add to that position.
For traders, the December $190 calls are already in-the-money. They can likely see mid-double-digit returns over the coming weeks. More aggressive traders may prefer to use a higher strike price for a less expensive options trade that could see a higher percentage return.
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.