Unusual Options Activity: Churchill Capital IV Corp (CCIV)

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  • Churchill Capital IV (CCIV) is a special purpose acquisition company. Shares have sold off in recent weeks, but one trader sees a move higher in shares.

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  • That’s based on the October $45 calls. With 210 days until expiration, over 1,400 contracts traded, an 111-fold rise in volume from the prior open interest near 133. Shares are currently near $30, so they would need to rise just over 50 percent for this trade to move in-the-money.

    The buyer paid about $6.20 for the call options.

    Shares of Churchill did trade near the $45 mark in February, as the company announced a plan to purchase electric vehicle play Lucid Motors. In fact, in the past year, shares have traded as high as $64, or more than double the current price.

    Action to take: There’s a lot of potential upside to shares here in the coming months. Given the volatility in shares, these October calls are an inexpensive way to bet on another surge higher in the coming months.

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  • Traders may even be able to potentially see triple-digit gains. Of course, given the volatility in the SPAC space, it’s also possible that a deal falls through, and shares drop back to the SPAC offering price of $10. In that case, the option would go to zero. This is a trade worth making with that small risk of a big loss in mind.