Unusual Options Activity: Cipher Mining (CIFR)

Bitcoin mining data center operator Cipher Mining (CIFR) has been on a tear this year, with shares up nearly 700 percent. One trader sees a pullback playing out in the months ahead.

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  • That’s based on the June 2024 $2.50 puts. With 176 days until expiration, 3,418 contracts traded compared to a prior open interest of 104, for a 33-fold rise in volume on the trade. The buyer of the puts paid $0.55 to make the bearish bet.

    Cipher shares recently traded just over $5, so the stock would need to get cut in half for the $2.50 puts to trade in-the-money. Such a move is possible, given the volatility in shares.

    The $2.50 strike is well over the stock’s 52-week low of $0.38.

    Shares have soared higher along with the price of bitcoin, which has more than doubled so far this year.

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  • Cipher is still operating at a steep loss. On the positive side, the company has a limited amount of debt that’s quite low compared to its equity.

    Action to take: Shares will likely continue to trend in the direction of bitcoin prices. So shares may get caught up in the small pullback currently underway for shares.

    However, investors will likely want to go long in the coming weeks, given the long-term bullish trend.

    For traders, the June puts could see triple-digit gains on a fast and sizeable drop in Cipher shares. But traders will likely want to go long ahead of bullish developments for crypto likely to unfold in 2024.


    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 of the companies mentioned in this article.

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