December 2020 $37 put options onAT&T (T) recently saw a 10-fold rise in volume. Over 1,600 contracts traded on an option that had a prior open interest of just 156 contracts. The bet expires 304 days. For the bet to move in-the-money, AT&T shares will need to drop about $1.25 from their current price near $38.25. That’s about 3.3 percent. The buyer of the puts also paid about $2.37. Ultimately, shares will need to trade closer to $35 to profit at expiration. That’s a drop of about 8.5 percent. Shares of the media and telecom giant are up 25 percent in the past year, about 4...

Trader bets on continued rally following earnings. June 2020 $340 calls onNvidia (NVDA) saw a 13-fold rise in volume in recent trading. The options went from 100 open contracts to over 1,300. The bet, expiring in 123 days, is that shares will rally about 17.2 percent from their current price near $290. The option buyer paid about $7.80 per share, so shares will need to trade closer to $348 to profit at expiration. That’s a full 20 percent higher. Shares of the company had already jumped following a great earnings report. Shares rose nearly 7 percent on a flat day for the markets. S...

July 17th put options with a $20 strike onKraft Heinz (KHC) saw a 9-fold rise in volume, going from 112 open trades to just over 1,030. The trade, expiring in 154 days, would move in-the-money if shares dropped about 18 percent from their current price near $27.50. The trader paid $0.23, or $23 per contract, to make the bet, so shares would need to drop to $19.70, well below the stock’s 52-week lows, to profit at expiration. Shares of Kraft Heinz have struggled over the past year amidst slowing sales and various asset write-downs. The company’s latest earnings report on February 13th ...

February 28th call options with a $121 strike onTarget (TGT) saw a 194-fold explosion in volume, going from a mere 122 open contracts to a volume of over 23,736 contracts. The bet expires in just 15 days. It’s a bet that shares can rise about $3 from their price around $118, or 2.5 percent. The trader buying the options paid $0.98, so shares will really need to close north of $122 at expiration to profit. The company next reports earnings on March 3rd, after this trade expires, so a bump from earnings are unlikely to help there. Shares dropped after the last earnings report, but trade...

January 2022 call options onSnapchat (SNAP) saw over 17,621 contracts trade, and 18-fold rise over the prior interest near 1,000. The contracts, expiring in 709 days, are a bet on the company roughly doubling from their current price near $17.60. The option buyer also paid $1.50 per contract, so shares would need to clear $36.50 at expiration to profit. That would bring the return expectation up to 107 percent over today’s share price. A doubling would also bring the company’s market cap to around $50 billion. Shares are up 95 percent in the past year, roughly four times higher than t...

February 28th $27 call options oniQIYI (IQ) saw a 57-fold increase in volume, going from 151 open contracts to over 8,600 options trade. The bet, expiring in 17 days, is for shares to rise about $1.75 from their current price near $25.25. That’s about a 7 percent return. The call buyer also paid about $1.00 for the trade, so shares would really need to clear $28 at expiration for the trader to profit. An internet entertainment platform based out of China, iQIYI is a subsidiary of Baidu. Shares are up 18 percent in the last year, just underperforming the S&P 500.Action to take: Whi...

Trader bets on major rally in coming months.April 17th $80 call options onGilead Sciences (GILD) saw a 38-fold rise in trading, going from 805 open contacts to over 30,300 trade hands. The bet, expiring in just 68 days, is that shares will move about $12 higher from their price of $68, or about 17.6 percent. The total returns on shares will have to clear 20 percent by expiration, given that the buyer of the options paid $1.30 for the stake. Gilead Sciences, a biotech company working on a variety of drugs related to the treatment of sexually-transmitted diseases, has attracted investor...

Trader bets big on moderate rally this month.February 28th call options with a $25 strike price onL Brands Inc (LB) saw a 100-fold surge in volume, going from 100 open contracts to around 10,000 trade hands. The bet, expiring in 21 days, is that shares will rally to $25 from their current price near $24.50, or just over 2 percent. The option buyer also paid about $1.15 for the contract, so shares would need to clear $26.15 to profit the buyer at expiration. L Brands is the holding company for a variety of apparel and personal care products, best known for Victoria’s Secret and Bath &a...

Trader bets on drop in shares through June.June 2020 $185 put options onLululemon (LULU) saw a 9-fold rise in volume, going from 141 open contracts to over 1,300. The trade, expiring in 134 days, implies about a 25 percent drop in shares from their current price near $245. Shares have been in an uptrend for several months and are near all-time highs. The trader also paid about $2.63 for the put options, so shares would need to drop to $182 or lower to profit at expiration.Action to take: With shares of the company up 68 percent in the past year, some caution on further upside is warrante...