We have another big slate of earnings and earnings plays hitting the tape this week as markets squeezed higher Tuesday… And though not quite as active as Monday, we still saw some interesting orders…
Starting with Roblox, which reports before the open Wednesday.
We’ve seen repeat buying in RBLX this week, both to the long and short sides…
But, as we saw Tuesday morning, out-of-the-money puts are often hedges for long stock positions. What does that mean?
Say a hedge fund is holding a million shares of a stock, and it tanks on earnings. As insurance to offset a potential loss, the fund might place an OTM short bet. That way, they can recoup some money if it tanks.
In Monday’s video, I discussed Datadog (DDOG) after we saw some puts that were $9 OTM hit the News Flow Scanner. So these were way OTM and wouldn’t you know, DDOG popped 30% on Tuesday.
So those puts ended up worthless. But the fund that was long the stock still made out like a bandit, even after likely losing every penny of the $146K they spent on insurance puts.
Welp, same thing for RBLX on Tuesday, but this time we also saw long bets — plural, which is always nice.
A trader bought the weekly $34.50 calls on Monday, dropping about $121K when shares were trading just over $34. Then we saw some $30.50 weekly puts about an hour before close Monday with shares trading under $34.
Tuesday afternoon, another order for weekly puts came in, this time in the $31 strike.
But then we saw another order for the $34.50 calls, this time for about $182K with shares trading a hair under $35.
Now, this is important… As I always say, these are earnings plays so there is greater risk. These longs and shorts could both go to $0 Wednesday morning, so we must respect the risk involved and trade small.
Market makers are implying about a $4.75 move either up or down, so the $31 puts are theoretically still in play here.
But if you ask me which direction I’d be more confident in, it’s the in-the-money calls.
Tuesday’s Top Order Flow:
- CNQ Jan24 Strike: 67.5 Calls premium: $192,798 ABOVE ASK BULLISH
Trade Date: November 7, 2023 Trade Time: 12:21 pm - AMZN Nov23 Strike: 144 Calls premium: $397,204 ASK BULLISH
Trade Date: November 7, 2023 Trade Time: 11:41 am - RBLX Nov23 10th Strike: 34.5 Calls premium: $182,196 ASK BULLISH
Trade Date: November 7, 2023 Trade Time: 12:52 pm
Note: If no date is listed after the month, it’s the monthly expiration (third Friday).
Lance doesn’t want the CCP spying on him, so you’ll never find him on TikTok. Same goes for other social media sites, which are filled with impersonators and scammers.
You can only find him on his personal YouTube Channel — smash that Subscribe button! https://www.youtube.com/@LanceIppolito
And in his private Telegram channel: https://t.me/+-gVwEIwGJhplMTgx
*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
Pst… It Has Nothing to Do With Stocks!
Have you heard of Jeffry Turnmire’s ONE ticker anomaly?
And how regular folks like you have been able to lock in some incredible triple digit gains in just 8 days or less?
Now, of course he can’t promise future returns; not all trades work out this well and there have been some losers too.
But this one ticker has nothing to do with stocks…
Nothing to do with bonds or gold…
And nothing to do with risky penny stocks.
But for whatever reason, it always seems to explode during an 8-day window at a specific time each month!
I don’t want to spill all the beans in this email…
The profits and performance shown are not typical, we make no future earnings claims, and you may lose money. From 5/26/23 – 11/1/23 the win rate is 67%, the average winner is 58%, the average return is 21.2 % over an 8 day hold time.
