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...

Trader bets on decline in the next month.March 13th $200 put options onFacebook (FB) saw a 83-fold rise in volume, going from 106 open contracts to over 8,850. The bet, expiring in 37 days, would require shares to drop about 4 percent between now and expiration in March. The trader paid about $3.30 per contract, so shares would need to drop under $196 by then to profit at expiration. Facebook recently reported solid earnings, but shares sold off, so the trader may see more weakness in the company specifically. Shares would also make for a hedge against increased market volatility in t...

Traders bet on continued rally after double-digit move higher Monday.Shares ofTesla Motors (TSLA) rose over 15 percent in trading on the news that the company would be able to expand in China. What’s more, since earnings last week, shares are up over 25 percent. That’s led to some traders betting on a further rally. The February 7th $805 call options saw over 1,800 contracts trade compared to a prior open interest of 100—an 18-fold rise in volume. The bet, expiring in 3 days, is that the company will see its shares rise from around $750 to just over $800. The option buyer paid about $...

Trader bets on 17 percent rally in shares in the next year.January 2021 $235 call options onVisa (V) saw a four-fold rise in volume, going from 200 contracts to over 750. The bet, expiring 347 days, is that shares will move higher from around $200 by about 17 percent. The buyer also paid about $4.75 per share, so they’ll only make a profit at expiration if shares hit new all-time highs of $240. The buy comes after shares dropped slightly after lackluster earnings numbers. Even with the lackluster earnings numbers, Visa is the best play in the oligopoly credit card space. With 13 pe...

Trader bets on rally with in-the-money calls.April 2020 $34 call options onAT&T (T) saw a 13-fold rise in volume, going from 144 open contracts to nearly 1,900 trade hands. The bet, expiring in 77 days, is about $3 in-the-money. The buyer of the calls expects a further rally from here, and can profit from any dollar-for-dollar move in shares. The buyer paid $3.50 per contract on average, or about $3 of “moneyness” of the option and $0.50 in time premium. Shares would need to be at $37.50 or higher at expiration for the option buyer to profit from this trade.Action to take: AT&...

Trader bets on rally in next week.With 8 days until expiration, the February 7th $16 call options onFireEye (FEYE) saw an explosion in volume, going from 170 open contracts to over 7,350—a 43-fold rise. The bet, which is essentially at-the-money as shares trade around $16, cost the option buyer about $0.50, or $50 per contract. The trade will profit the buyer only if shares clear $16.50 by the option expiration. With FireEye reporting earnings on February 5th, this trade is a bet on a rally in shares after earnings.Action to take: Speculators looking to potentially double their money ...

Trader bets on 70 percent rally by July.July $85 call options onAdvanced Micro Devices (AMD) saw a 30-fold surge in volume, going from 100 open contracts to about 3,000. The trade, expiring in 170 days, indicates a 70 percent move higher for shares, based on their current price near $50. The buyer of these options also paid about $0.60, or $60 per contract, so the trader may just be betting on the company before it reported earnings after the market close on January 28th. Shares of the chipmaker have had a monster year with a 144 percent gain already. The company is starting to see th...

Trader bets on jump in shares in the next month.February 21st call options with an $87 strike onAbbVie (ABBV) saw a 30-fold rise in volume, going from 104 open contracts to over 3,100. The trade, expiring in 24 days, is a bet on shares rising about 3 percent from their price near $84.50. Adding in the $1.65 the option buyer paid on average, the trade will profit the buyer if shares rally closer to 5 percent. AbbVie has recently shed some of the drugs in its portfolio ahead of its $63 billion merger with Allergan, creating a pharmaceutical powerhouse.Action to take: We like shares of A...

Trader bets on decline through March.March 2020 $23 put options onJuniper Networks (JNPR) saw a 50-fold surge in volume, going from 123 open contracts to over 5,900 trade hands. The trade, expiring in 53 days, is a bet that shares of the company will fall at least $1.50 from their current price. For the trader to profit at expiration, shares would need to close in on $22.65, to make up for the cost of $0.45 per contract. Shares of the communication equipment manufacturer and provider have declined 13 percent in the past year.Action to take: Shares trade at 13 times forward earnings, b...

Trader bets on 80 percent rally in shares this year.January 2021 calls with a $270 strike price onSpotify Technology (SPOT) saw a five-fold increase in volume, going from 157 open contracts to over 825. The bet, expiring in 358 days, would call for an 80 percent rally in shares from the current price around $148. The trader paid about $1.05, or $105 per contract, so any rally in Spotify shares this year would likely lead to outsized returns on this trade. Shares of the music streaming company are up 13 percent in the past year, hardly making it the kind of fast-growth play likely to c...