Unusual Options Activity: Mastercard Incorporated (MA)

shutterstock_14266214421

Shares of credit card giant
Mastercard (MA) have been sliding over the past month. However, one trader sees the potential for a move higher in the coming few months.

  • Special: 32,481% Growth: The SmartPhone Startup Outpacing Apple and Samsung
  • That’s based on the November $355 calls. With 77 days until expiration, over 17,960 contracts traded against a prior open interest of 110, for a 163-fold explosion in volume. The buyer of the calls paid about $13.85 to make the trade.

    With shares around $350, the option is nearly at-the-money. Over the past year, shares have traded as high as $401. Should shares jump back to that high, the option could move as high as $50, or more than triple the current price.
    Action to take: The recent slide in shares has led to a slightly negative return over the past year. so it’s possible that shares could snap back in the next few months.

    • Bill O'Reilly Interviews Wall Street Expert to Help YOU Achieve the American Dream

      "We're going to bring back the American Dream... bigger, better, bolder, richer, safer, and stronger than ever before." - President Donald Trump

      During Trump's first term, 8 million Americans became millionaires despite constant resistance from Democrats and even some Republicans in his cabinet.

      Now, with Republicans controlling both houses and the Fed cutting rates, everything is aligned for even greater growth.

      Bill O'Reilly interviews investment expert Alexander Green who reveals details on 6 stocks with the potential to soar under Trump's pro-business policies.

      Get the Details Right Here

    However, the stock does trade at 43 times earnings, a bit of a premium even in today’s markets. Investors may like shares near these prices, although the 0.5 percent dividend is on the low side.

    The option trade is at a decent strike price and date for today’s short-term oversold conditions in shares. Traders should look for mid-to-high double-digit gains in the option and look to exit quickly, as shares may be in a longer-term downtrend that could resume as shares come off of oversold levels.

  • Special: The Crypto that Could Replace Visa?
  •  
    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 of the companies mentioned in this article.

    [wp-post-author image-layout="round"]