Unusual Options Activity: Cloudera (CLDR)

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  • Enterprise data cloud platform firm Cloudera (CLDR) has seen shares rally nearly 70 percent since early November. At least one trader sees shares continuing to head higher.

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  • That’s based on the August 2021 $17.50 call option. Over 16,400 contracts traded against a prior open interest of 143, for a 144-fold rise in volume. The call option is at-the-money, given the current price of $17.43. The trader paid $3.88 for the trade on average.

    The trade expires in 198 days. Shares are currently sitting at a 52-week high, although the company has traded as high as $23 per share since its IPO in 2017.

    The company is not yet profitable, but has been growing revenue and earnings rapidly and has more cash than debt on its balance sheet, so the firm should be able to navigate any market challenges this year.

    Action to take: This options trade is attractive. As an at-the-money trade, it should perform about in-line with how shares perform. The likelihood of a triple-digit gain is lower than buying an out-of-the-money trade, but the chances of being able to make some profit remain high if the rally in shares starts to slow down.

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  • Traders should consider the option with an eye towards high double-digit or low triple-digit gains, and to get out of the trade well before expiration.