Trading Tips Blog

Traders bet on continued rally. The February $200 call option on Visa (V) saw a 10-fold surge in volume, going from 140 open contracts to seeing over 1,400 trade hands. The bet, expiring in 57 days, is that shares can move up to $200 from their current price near $188. The $12 move in shares is about a 6.4 percent rally. The option buyer paid $1.02, or $102 per contract, making for an inexpensive way to bet on the current rally in shares ...
Read More About This

Traders bet on continued rally. The January 10th, 2020 $57 call options on Micron (MU) saw a 37-fold rise in volume, going from 139 open contracts to over 5,000. With only 16 days until the option expires, shares will need to rise 2.8 percent in order to move in-the-money. And costing around $0.90, or $90 per contract, shares may need to move closer to $58 before the call buyer profits. Shares of Micron are already trading near a 52-week high and have surged ...
Read More About This

Traders bet on drop after massive rally. 16 months ago, Tesla Motors (TSLA) CEO Elon Musk tweeted about taking the company private at $420 per share. When that deal didn’t go through, shares got hammered—but now shares are closing in on that price after a massive rally. Some traders think this is a sign that the rally is about to end, judging by the activity in Tesla Motors put options. The December 27th $415 puts saw over 4,900 contracts trade, a 13-fold rise ...
Read More About This

Traders bet on rally to continue. January 31st, 2020 $40.50 call options on AT&T (T) saw a 25-fold rise in open interest, going from 205 contracts to over 5,000 trade hands. With 39 days until expiration, the bet is that shares will rally another $1.50, or 3.8 percent from their current price around $39. The buyer paid around $0.32, or $32 per option contract, and would need to see shares closer to $41 to make a profit at expiration. AT&T, the telecom giant, has ...
Read More About This

Traders bet on massive rally in the first half of 2020. July 2020 $65 call options on Intel (INTC) saw a 19-fold increase in volume. Going from 213 to over 3,900 contracts, the bet is that shares will continue their rally. The recent price for shares around $57.50 relative to the option strike price indicates a 13 percent move higher in the next 210 days before expiration. The traders paid around $1.55, or $155 per contract. Any move closer to the strike price in ...
Read More About This

Some traders rely exclusively on market patterns. And there are few patterns as famous as the Santa Claus rally—the propensity for markets to head up in the final weeks of the year. Trading Tips’ Andrew Packer explains in our latest video ...
Read More About This

Traders bet on company heading higher. The February 2020 $135 call options on Eli Lilly and Company (LLY) saw a 20-fold rise in volume, going from 164 open contracts to over 3,380 trade hands. With 64 days to go until expiration and with shares trading around $128.50, the option will move in-the-money with a 5 percent rally in shares. Given the option price around $1.95, the option buyer stands to profit at expiration if shares hit $137 or higher. The option trade comes as ...
Read More About This

Rise in put-buying suggests drop in shares. Multiple options trades on Apple (AAPL) suggested a potential decline in shares. Of the trades made with high volume, the most interesting was the July 2020 $265 put option. That trade saw a six-fold rise in volume with nearly 600 contracts trade. Shares trade around $280, implying at least a $15 per-share downside, or about a 5.3 percent drop. With 212 days until expiration, any move down in Apple shares would allow the option to rally, ...
Read More About This