With markets directionless, BIG traders are creating their own markets to get returns. For example…
Look at the junkie stocks — aka HIGH BETA — on this list…
All these stocks have high short interest and can move despite what the S&P 500 is doing.
Why today? Robinhood (HOOD) reports earnings after the close and traders are front-running the action.
And what are the most active stocks on Robinhood? You guessed it… the stocks in my screenshot.
But what about ol’ Robinhood? The bulls got a couple of pretty sizable orders in the past couple of days with shares popping over 6% Wednesday ahead of the report!
We saw two orders, so let’s start with the one that’s an obvious NO…
A trader dropped $287k on the August monthly expiration — that’s the first NO — $43 strike calls… and with shares trading above $56 this afternoon, there’s your second NO.
These are obviously DEEP in the money and extremely expensive — nearly $2k just for one contract, and we like CHEAP options around here.
So the second order is much more interesting. It’s in the weekly $56 strike calls, and a cool $900k in premium.
Now, these are also on the pricey side since they’re right at the money. And with market makers expecting a move of $6.74 higher or lower, one could reasonably move a few bucks higher to lower the cost.
Just beware that this order expires Friday so it can and will go to $0 fast if wrong or the stock doesn’t move enough — and we could easily see a “sell the news” reaction after today’s BIG run-up.
We’ve also seen a small flurry of activity in Cisco Systems (CSCO) the past couple of days, with traders grabbing the February monthly and Feb. 28, $64, $65 and $66 strike calls with shares trading just above $62 this afternoon.
Market makers expect a move of $3.26 higher or lower, so if one’s feeling bullish on Cisco for earnings, we’d definitely stick closer to the $62 strike — the monthly $63 calls are about $1.35 this afternoon, and that’s pretty close to the sweet spot of $1.00 that we love so much.
Just remember to respect the risk and know that they can go to $0 fast!
Order Flow:
*This is for informational and educational purposes only. These are not official alerts issued by Lance, but rather some interesting orders picked by the team at Lance Ippolito Trading.
There is inherent risk in trading. Trade at your own risk.
Note: If no date is listed after the month, it’s the monthly expiration (third Friday).
The team at Lance Ippolito Trading
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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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