Unusual Options Activity: Marqeta (MQ)

Transaction processing services company Marqeta (MQ) has seen shares get cut in half over the past year. One trader sees further downside in the months ahead.

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  • That’s based on the June $3.50 puts. With 93 days until expiration, 67,259 contracts traded compared to a prior open interest of 100, for a staggering 673-fold jump in volume on the trade. The buyer of the puts paid $0.23 to make the downside bet.

    Shares recently went for about $4.25, so the stock would need to drop about 75 cents, or about 20 percent, for the trade to move in-the-money. Marqeta shares would need to set a new 52-week low under their prior low of $4.14 for the option to play out.

    The company has struggled with losses in the past year, losing over $200 million despite bringing in nearly $750 million in revenue. While the company has been bringing in more money, the steep losses could cause the company to burn through its cash.

    Action to take: Current fears in the financial sector suggest more downside here. Investors interested in shares should hold off until there’s more clarity in the space, even if it means missing out on the start of a new rally in shares.

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  • For traders, the June puts are perfect for today’s environment, and can deliver high-double-digit gains or better in the months ahead before expiration.


    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.