With earnings season winding down… for a couple of weeks until it begins again, at least… we’re getting to the bottom of the barrel.
But we did see a couple of orders for upcoming reporters, including blue jeans and clothing heavyweight Levi’s (LEVI).
With the market selling off hard Tuesday, Levi’s took a nosedive of more than 6% ahead of its report after the close on Wednesday.
And with blood in the water and shares dipping over $1 to around $19, a bullish trader stepped in and grabbed the April monthly expiration, $20 strike calls.
And he or she wasn’t the only one as there were well over 3,000 orders in this particular contract by lunchtime on the East Coast.
Before Tuesday’s 6% slide, shares of LEVI were up 24% year to date and the chart has been on a bullish uptrend since late September.
With market markers expecting a move of $1.23 higher or lower, this could be an opportunity to get some calls on the cheap (about $0.60 each as of 12:30 p.m. ET).
Of course, you must respect the risk because they could sink fast if wrong. There is a little time to recover with the expiration still three Fridays away.
We also saw a bearish bet in Acuity Brands (AYI) — which reports before the open Wednesday — that is also well within the market makers’ expected move of $20.24 higher or lower and shares trading around $261.
Puts are often hedges against long positions should the stock tank on earnings, so respect the risk!
We also threw in a BIG bullish bet on Coinbase (COIN) for good measure.
Tuesday’s Top Order Flow:
- LEVI Apr24 Strike: 20 Calls premium: $113,878 ASK BULLISH
Trade Date: April 2, 2024 Trade Time: 10:08 am - AYI Apr24 Strike: 250 Puts premium: $189,540 ASK BEARISH
Trade Date: April 2, 2024 Trade Time: 10:50 am - COIN Apr24 26th Strike: 285 Calls premium: $1,291,500 ASK BULLISH
Trade Date: April 2, 2024 Trade Time: 12:27 pm
Note: If no date is listed after the month, it’s the monthly expiration (third Friday).
Lance Ippolito Trading Team
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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