Self-driving technology company Aurora Innovation (AUR) has surged over 115% in the past year. One trader is betting shares will keep trending higher over the coming weeks.
That’s based on the May $6 calls. With 24 days until expiration, 23,379 contracts traded compared to a prior open interest of 245, for a 95-fold rise in volume on the trade. The buyer of the calls paid $0.85 to make the bullish bet.
Aurora shares recently traded for just over $6, making this an at-the-money trade. While the stock has been trending higher, shares spiked to a 52-week high of $10.77 in mid-February, suggesting a price point the stock may retest in the future.
Operationally, Aurora is an early-stage company, and has been operating at a loss. However, the balance sheet has over $1.2 billion in cash, which should give Aurora plenty of runway to roll out its self-driving technology.
Action to take: Tech investors looking for an innovative speculation may want to consider accumulating shares here. Aurora has large potential upside as self-driving technology continues to develop, but shares will be incredibly volatile. Investors who buy now should also look to take partial profits after a big gain in shares.
For traders, the May $6 calls plays to the stock’s current basing pattern following its selloff since February. Traders can likely see mid-double-digit gains from a trend higher in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
