Unusual Options Activity: The Trade Desk (TTD)

Shares of digital advertising firm The Trade Desk (TTD) have started moving higher in recent weeks after dropping and bottoming out in early May. One trader sees the potential for shares to head higher from here.

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  • That’s based on the August $75 calls. Over 61,475 contracts traded against an open interest of 2,050, for a 30-fold rise in volume. The buyer of the calls paid about $7.50 to make the trade, which expires in 37 days.

    The buy was made as shares traded just under $78, so the trade is nearly $3.00 in-the-money.

    The company has already seen shares rise 80 percent in the past year, but shares have pulled back from a 52-week high of $97, making this trade a reasonable one if the uptrend continues.

    Action to take: Shares look poised to continue higher from here. The company is profitable, but doesn’t yet pay a dividend, so investors won’t get paid to wait.

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  • For traders, these August calls look attractive. They’re already slightly in-the-money, which means they may not have the highest potential return if shares surge higher in the weeks ahead. But the potential of a complete wipeout on the options is less likely as a result. That makes for an attractive trade on this software service company.

     

    Disclosure: The author of this article has no position in the company mentioned here, but may make a trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.