Video game developer Electronic Arts (EA) is down 6% over the past year, but the stock has been rising since the start of 2025. One trader sees further upside in the weeks ahead.
That’s based on the April $140 calls. With 50 days until expiration, 5,076 contracts traded compared to a prior open interest of 123, for a 41-fold rise in volume on the trade. The buyer of the calls paid $2.55 to make the bullish bet.
EA shares recently traded for about $134, so shares would need to rise by $6, or about 4.4%, for the option to move in-the-money. The strike price is well below EA’s 52-week high of $168.50.
The developer has had a poor year amid a quiet slate for AAA game releases.
Revenues declined 3% over the past year, and earnings growth rose by a measly 1%. Shares trade at a rich 33 times earnings, about where they’ve traded over the past two years.
Action to take: EA shares seem fairly valued here, but they are in an uptrend and may head higher in the coming months, making for an attractive momentum investment play now. EA also pays a 0.6% dividend at current prices.
For traders, the April $140 calls play well to the current uptrend. Traders can likely nab double-digit returns on the options given their current price and the upside potential in EA shares.
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.
