Unusual Options Activity: Marqueta, Inc (MQ)

Shares of programming platform company Marqueta (MQ) have lost over two-thirds of their value in the past six months. One trader sees the possibility for a strong rebound here.

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  • That’s based on the September $10 calls. With 183 days until expiration, 7,523 contracts traded compared to a prior open interest of 110, for a 68-fold surge in volume. The buyer of the options paid $1.80 to make the trade.

    Revenue is up 72 percent at the company over the past year, but as an early-stage tech company far from profitability, investors have soured on shares, particularly in the past few months. With over $3 per share in net cash however, the stock is looking oversold coming off an all-time high of nearly $38 per share.

    Action to take: At today’s prices, investors can likely see a decent return even if there’s still some short-term volatility. And at today’s valuation, it’s possible a bigger company comes along with a buyout offer for the high-growth trade.

    For traders, the September calls have ample time to play out, and are inexpensive enough to leverage a move higher in shares in the coming months. As long as that timing plays out, the option can offer far better returns than owning shares for a rebound.

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    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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