Unusual Options Activity: Aurora Cannabis (ACB)

Shares of pot producer Aurora Cannabis (ACB) have been trending higher in the past few weeks, thanks to strong earnings in the sector. One trader sees shares moving even higher in the coming weeks.

  • Special: This Company’s Share Price has Increased 1650% Since 2016
  • That’s based on the December 3 $9.00 calls. Over 26,340 contracts traded against an open interest of 199, for a 221-fold jump in volume. The trade has 17 days left to play out. The buyer of the calls paid $0.70 to make the trade.

    With shares already rallying to about $8.50, a move to $9 would be about another 6 percent rally higher, something the stock could easily achieve in the coming weeks, sending the options in-the-money. That would also leave shares at about half of their 52-week high of $19.

    Aurora is currently unprofitable, but cannabis growth has increased substantially over the past year as a number of states have legalized pot, either medically or recreationally.

    Action to take: Investors may like shares here, although there’s likely more upside in smaller pot stocks and not big Canadian names like Aurora.

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  • Traders may like the December call. While it doesn’t have much time to play out, these stocks have caught some momentum in recent weeks. As a simple way to play the share higher in the next few days, traders should look for high double-digit profits or better, and to take a profit.

     

    Disclosure: The author of this article has no position in the company mentioned here, and does not intend to trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.