Unusual Options Activity: Marathon Digital Holdings (MARA)

Cryptocurrency miner Marathon Digital Holdings (MARA) has performed well in the past year, with a 38 percent move higher. One trader sees a continued move higher in the coming months.

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  • That’s based on the December $12 calls. With 175 days until expiration, 7,471 contracts traded compared to a prior open interest of 138, for a 54-fold rise in volume on the trade. The buyer of the calls paid $4.00 to make the bullish bet.

    Shares recently traded for $11.75, making this an at-the-money trade. The strike price is still well under the stock’s 52-week high of $18.88.

    Marathon has struggled in the past year, amid a crypto winter. Revenues are down 1 percent, and Marathon hasn’t earned a profit. However, the company has ample cash to work through the current crypto winter, and profitability is likely to return as crypto prices move higher. Such a move is likely based on historic trends, as well as the potential for crypto ETFs in the coming months.

    Action to take: Shares will likely trade based on moves in the cryptocurrency market, particularly bitcoin. The crypto space is in an uptrend, which suggests a further rally ahead for investors and traders.

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  • For traders, the December calls are reasonably priced for a further rally, and could easily move in-the-money in the coming months. Traders can likely see high double-digit returns of better.


    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.