July 11, 2023
Hot Option Activity in SHOP/UBER
Ahead of the big inflation data report tomorrow morning, option activity is running wildly bullish in growth stocks, which includes two of our current holdings. Here are some of those trades:
Buyer of 20,000 Shopify (SHOP) July 66 Calls (exp. 7/14) for $0.30 – Stock at 63
Buyer of 8,000 Uber (UBER) July 45 Calls for $0.85 – Stock at 44.5
Buyer of 5,000 Uber (UBER) July 45 Calls (exp. 7/28) for $1.20 – Stock at 44.5
The trades above are a small sample of this bullish option activity in these two stocks as calls are outpacing puts on a ratio of 6:1 in SHOP and 4:1 in UBER.
In addition, we are seeing similar bullish option activity in stocks like NET/TTD/UPST/U/PINS and many more.
Stepping back, while we already own positions in three growth stocks (SHOP/UBER/DKNG), should this option activity continue to run hot we could add even more exposure to this group in the days to come.
July 10, 2023
Due to a somewhat disastrous weekend of travel back to the Mintz home, this is going to be a short Monday update. Here is a quick look at the market, and then where we stand with our positions.
The market came under some pressure last week as the S&P 500 fell 1.16%, the Dow lost 2% and the Nasdaq declined by 1%. And while the market lost ground, I would note that it was a holiday-shortened week, and option volumes were down dramatically.
The stocks in the portfolio also lost some ground, though mostly the it was a non-event of a week for our positions.
Long positions: BAC, BSX, CLF, DKNG, INTC, IWM, SHOP, UBER
Bearish Positions: QQQ
Bank of America (BAC) July 31 Covered Call – BAC was down marginally last week ahead of earnings next Tuesday. The July 31 call that we sold for $0.40 is now worth $0.10.
Boston Scientific (BSX) November 55 Call – BSX fell 3% last week as med-tech stocks came under pressure. Earnings will be released the last week of July.
Cleveland-Cliffs (CLF) July 16 Covered Call – CLF fell 2.75% last week, though is still trading above our short strike price (good).
DraftKings (DKNG) January 25 Call – As I wrote on Friday, DKNG received another upgrade late last week, as Oppenheimer raised their price target to 35. By week’s end DKNG had added 0.3%.
Intel (INTC) January 34 Call – INTC fell 4.5% last week as semiconductors came under pressure. Despite the stock decline, option activity remains very strong in the stock.
Russell 2000 (IWM) August 177 Call – The IWM was down marginally last week. Time is definitely becoming an issue with this position as August approaches, which means should the ETF start to fall, we could sell our trade.
Nasdaq ETF (QQQ) December 370 Puts – The Nasdaq was down 1% last week, and there was certainly selling pressure on growth stocks. Because of that, we will continue to hold our put position.
Shopify (SHOP) January 62/90 Bull Call Spread – SHOP fell 4.5% last week as growth stocks came under pressure. Despite the stock decline, option activity remains very bullish in SHOP.
Uber (UBER) December 40/50 Bull Call Spread – UBER was mostly unchanged last week, and continues to look solid. Not much more to add as I like our position quite a bit.