Friday, May 10, 2024
While it’s been a rough year for the Ark Innovation ETF (ARKK), a large options trade may suggest a brighter 2023. A strategist purchased what appears to be a 30,000-lot of covered calls on ARK that expire in February. The covered calls allow for over 10% upside potential in share appreciation before capping out, while […]
It’s always interesting to see a very large spread trade occur in a stock that doesn’t have a very active options chain. Dlocal Limited (DLO) offers a payment system for emerging markets and generally trades about 5,000 options per day. On one day last week, one spread accounted for 30,000 contracts. It appears to be […]
When a stock is trading in a range, sometimes a covered call strategy can be a good way to take advantage of the situation. Sunpower (SPWR) has been range-bound for most of the year and is trading somewhere near the middle of its range. A trader is attempting to capitalize off the situation by making […]
While trading tends to slow down during Thanksgiving week, the weather doesn’t always comply. Freezing temperatures have caused a surge in natural gas prices, and trading has become brisk in the United States Natural Gas Fund (UNG). UNG is the most popular pure play ETF for natural gas. A sophisticated trader recently placed what looks […]
Bond prices have rallied lately with the expectations that interest rates won’t go quite as high as originally expected. (Bond prices move opposite of yields.) This includes government bonds, corporate bonds, and high yield bonds as well. A very large bullish call spread in iShares iBoxx $ High Yield Corporate Bond ETF (HYG) suggests there […]
The collapse in cryptocurrencies (brought about by the insolvency of FTX) spilled over into equities markets last week. Bears are betting that Coinbase (COIN) is going to succumb to the downside pressure as well. While the FTX news was being digested by the market, traders purchased a large amount of puts in COIN, possibly expecting […]
It’s earnings season, so there’s been plenty of options action in single stock names. Recently, a strategist purchased what appears to be a very bullish call spread in Disney (DIS). The call spread – buying one call and selling another at a higher price in the same expiration period – doesn’t expire until right after […]
Hedging against a big stock selloff can be expensive when using options. One way to reduce the cost is by using options spreads. A more complex spread that can be useful in this situation is a put butterfly. A strategist bought over 20,000 put butterflies in SPDR S&P 500 ETF (SPY) that expire at the […]
With the bond market in focus this year, there’s been plenty of options action in iShares 20+ Year Treasury Bond ETF (TLT). The long-term bond fund is the most active of the treasury bond ETFs, trading around 180,000 options per day on average. A large trader or fund placed a very interesting spread trade last […]
One way to trade a potential market rebound without the risk of buying stocks outright is by using covered calls. A covered call will cap the upside of a stock or index, but provides cash flow and a bit of downside cushion. Recently, a trader placed a 20,000-lot covered call trade using iShares Russell 2000 […]
