3 Mammoth Options Bets That Could Signal Major Market Moves

(number #2 is wild)                                                                                                                                                                                                                                                                                                                                                                                                                 September 02, 2024 | [Read Online]( [fb]( [fb]( [fb]( [fb](mailto:?subject=Post%20from%20TheoTrade%20%28FOMO%29&body=3%20Mammoth%20Options%20Bets%20That%20Could%20Signal%20Major%20Market%20Moves%3A%20%28number%20%232%20is%20wild%29%0A%0Ahttps%3A%2F%2Ftheotrade.beehiiv.com%2Fp%2F3-mammoth-options-bets-signal-major-market-moves) Brandon Chapman here. Sometimes the biggest moves in the market are telegraphed well in advance, but you won't find these signals in any SEC filing. Why? Because the market's heavyweight players often use options to express their positions, leaving breadcrumbs for savvy investors to follow. Today, we're going to dive into some of the biggest options trades from last week that could be setting the stage for major moves in the coming days. But first, let's talk about what unusual options activity really is and why it matters to you as an investor or trader. Unusual options activity is like catching Wall Street's big fish in the act. It's characterized by above-average option volume, large trades executed in a single print, and high volume relative to open interest. When you see these patterns, it's often a sign that someone with deep pockets – we're talking hedge funds, institutional investors, or even corporate insiders – is making a big bet. Why do these players use options? Simple: leverage, stealth, and the potential for outsized returns. Options allow them to control large blocks of shares without moving the underlying stock price too much. It's a way for them to position themselves for big moves while flying under the radar of most retail investors. Now, let's pull back the curtain on some of the most intriguing options trades from last week. These aren't just random bets – they could be signals of upcoming news, earnings surprises, or major market shifts. By understanding these trades, you might just get a glimpse into the crystal ball of Wall Street's elite. #1: Pinterest (PINS) On Friday we saw a ton of options activity in PINS calls. Specifically, we saw a trader come in at 9:46 AM ET and buy 5,438 contracts of the September 13 $32.5 calls for $0.43. That’s a $233K bet on otm calls. They’ll need PINS to rise by 2.7% by the September 13 expiration just to break even. In addition, we saw over 11k contracts trade that strike vs. 2.2K open interest, which indicates these are new positions. But that’s not all… Right before the bell on Friday, a trader came in at 3:48 PM ET and bought 4K $34 calls for $0.20 expiring on September 13. That’s an $80K on otm calls. For this trade to just break-even on expiration, the trader will need PINS to rise by 6.7%. Over 8K contracts of the strike traded vs. 39 contracts of open interest. What’s going on PINS? Earnings are not till late October but someone is making some huge bets and is expecting a move within the next week or two. #2: Monster Bet In MSTR MicroStrategy has more or less become a bitcoin holding company at this point. It’s also one of the most hated stocks on Wall Street with a short float of 14.3% Is a short squeeze coming? On Friday morning someone came in and bought a whopping 31.7K contracts of the $137 calls for $2.35 expiring on September 6. That’s a nearly a $7.5M bet on options set to expire worthless in just a few days unless MSTR makes a move. The stock on Friday closed at $132.42, which means this trader will need MSTR to gain 5.2% this week just to break-even! Over 35k contracts traded on the strike vs. 305 contracts open interest. MSTR does not have earnings this week, so we can’t attribute this trade to a bet on earnings. Someone is expecting a big move and they believe it will happen this week. And are willing to bet nearly $7.5 million on it. Talk about conviction… #3: Shoals Technologies Shoals Technologies is a company that provides electrical balance of systems for solar, storage, and electric vehicle charging infrastructure. On Thursday they will hold their Investor Day Conference. On August 29th we saw some heavy call volume in the symbol. Someone came in and bought 5K contracts of the September 20 $5 calls for $0.54. Those calls last Friday had an options value of $0.68. But based on the open interest 8.4K, they are still likely holding onto the majority or all of their position. That’s right, despite possibly being up 24% and sitting on $65K in profits, they believe their is more upside in the name. This bet is not as risky as the PINS or MSTR trades we went over because these options are ITM. They are able to control 500K shares for only $270K with the call options. In addition to the $5 strike, we also see the $6 calls with open interest of 3.5K contracts. Will SHLS impress on its Investor Day? Someone is making a bet there is. Remember, unusual options activity can be a powerful tool in your trading arsenal, but it's not foolproof. Always do your own research and consider the broader market context. Stay vigilant, stay curious, and you might just spot the next big market move before it happens. 🚀 LIFETIME ACCESS TO IN/OUT ADVANTAGE FREE $2000 TICKET INCLUDED! Join us at the exclusive TheoTRADE luxury event in Scottsdale, Sept 12th-14th. Your choice: attend in person or virtually! 🔥 19 out of 22 trades cashed in! Don't miss out! 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