Many investors overlook this because the options are too confusing and there can be multiple implications from a single data point. However, traders looking for opportunities often like to see their thesis align with unusual options activity.
Simply put, when big traders or big investors (like hedge funds and investment firms) make the move, they can often leave their footprints behind. These imprints manifest themselves in the form of excessive options activity on the underlying stocks.
With that in mind, let’s look at five actions with a few heavy call flow last week.
Disney (DIS)
Disney (United States: DIS) The stock has wallowed in its poor performance this year, down about 3% so far in 2023. And that’s despite the strong performance of the S&P 500 and Nasdaq. Now Disney has caught our eye as the #1 stock on the Option Stream Ranking this week.
Institutions have been busy selling large amounts of deep-in-the-money put options — a bullish options trading.
On July 7 and 10, one or possibly more companies were noted for selling the January 2024 $150 and $160 put options in blocks of approximately $15-20 million. In total, just over $100 million of these options were sold between these trades.
A few days later, on July 12, someone sold $63 million of the January 2024 $160 in two transactions worth about $31.5 million each. Later in the day, they sold an additional $100 million of those put options (between trades) as well as $44.9 million of the January 2024 $150 put options.
Nvidia (NVDA)
Apparently every bull’s favorite stock this year, NVIDIA (United States: NVDA) was the No. 2 stock in the options stream rankings this week.
There were some pretty notable seven-digit numbers bearish options trades this week, but what really caught the eye was the significant deep-in-the-money call option buying that we saw.
That’s when a trader bought for $66.1 million on September’s $350 calls, which were in the money around $85 at the time of the trade on July 12. A day later, at the July 13 close, that contract was $110 in- the money.
It may have been the same trader, either increasing his position or potentially adding to it, as someone recouped $54.3 million on the September $370 calls on July 13.
Like the first trade, these calls expire in September and were around $80 in the money at the time of trade.
Meta platforms (META)
Up 91.7% so far in 2023, Meta platforms (United States: META) has been the best performing FAANG position so far this year – by far. Much of his notable options action arrived late in the week. The action here was slightly mixed, although given the size of the trades, it was decidedly more bullish than bearish.
That’s when a trader sold for $15.9 million on the January 2024 $160 calls – a bearish trade alone – who were deep in the money with shares trading at nearly $314 per share.
A few hours later, someone sold a similar number of calls, this time reaping a $15.1 million bounty by selling the January 2025 calls for $400 out of the money.
Interestingly, this second transaction came minutes after additional activity in some long-running calls. This represents approximately $87.9 million of the December 2025 $600 calls that were purchased. This is a very important position, especially since the strike price is roughly double the current stock price, although there are almost 900 days left until expiration.
Tesla (TSLA)
Like Meta, the action of options in You’re here (United States: TSLA) really picked up later in the week. Notably, on July 12, a trader sold $5.05 million of $360 put options expiring in nine days on July 21 and sold $12.6 million of $355 put options. with the same expiration.
With those calls expiring in such a short amount of time, it was quite an interesting game because those put options were so deep in the money.
However, this strike remained quite active.
This is when traders bought the July puts at $355, $360, $365 and $370. These purchases were mostly in the $5-6 million range, although one trader bought $12.48 million on July’s $355 put options. Another trader bought $3.5 million on July’s $305 put options, which expired on July 14.
Nike (NIKE)
Like Disney, Nike (WE OF) has had a mixed performance this year, with shares down around 7.5% so far in 2023. There wasn’t much option activity to note this week, though it certainly has tilted higher with several seven-digit trades on the uptrend. side (mainly through sales of put options).
However, one trade got stuck on the call side.
It was then that the trader bought for $2.56 million on the $110 September call, which was slightly out of the money at the time of the trade. Expiring in about two months, the trader is looking for a bullish rally to send Nike higher, with this position roughly at parity which should benefit from a rise in the share price.
This story originally appeared on Fintel.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
