May 16, 2025
Uber Update
Uber (UBER) is trading at a new high today following the disclosure that famed hedge fund investor Bill Ackman had bought $2.3 billion worth of the shares, which makes UBER the biggest holding in his portfolio.
And while I always like to see that the brightest minds in investing are buying the same stocks that we own, I would note that traders like Ackman can get in to, and then out of, positions pretty quickly if they sour on a position.
For example, Ackman recently made Nike (NKE) his biggest holding, and in the same disclosure as the UBER filing last night it became apparent that he had already sold out of all of his NKE shares.
And while Ackman sold out his NKE shares, he did tweet this morning, “Our 13F reflects our sale of Nike (NKE) common stock, but does not reflect our purchase of over-the-counter call options in a similar notional amount.”
What this means is Ackman sold his NKE stock but then bought call options that. IF he exercises them, would be worth the same amount of stock he previously owned. This is essentially a cheaper way to get exposure to NKE (much like the reason we trade call options!).
Regardless of all that …
I like the way UBER stock looks, and option activity has continued to ramp extremely bullish looking for the stock to break well above 100/110/120 in the months to come.
May 12, 2025
Weekly Update
The Federal Reserve event came and passed without much volatility last week as stocks were mostly quiet. For the week the S&P 500 fell 0.5%, the Dow lost 0.2%, and the Nasdaq declined by 0.3%
Stocks on Watch
I have a growing list of stocks on my radar for new buys, though interestingly that list (for now at least) doesn’t include some of the stocks that led the market higher in the last month.
For example, market leaders going into the last two weeks were clearly UBER, DASH, and PLTR. Yet despite the strong action heading into the release of their quarterly results, all three fell on earnings. Not the best sign … maybe. Let’s dive into some of the option activity following those disappointing stock reactions.
DASH fell from 205 to a low of 176 on earnings last week which was NOT great. Yet despite that stock decline, a trader rolled a big premium call position looking for the stock to rebound. Here is that trade:
Buyer of 33,000 DoorDash (DASH) September 165 Calls for $31.85 – Stock at 182 (rolled from June calls).
That trader has been rolling these calls successfully for many months. Maybe DASH is ready to run again.
Next up is PLTR, which is an interesting situation as well as the stock fell from 125 to 108 on earnings Tuesday, and then spiked back to 120 on Thursday. And into that bounce back in the shares call buying ramped up in a big way, including this June call buy:
Buyer of 4,000 Palantir (PLTR) June 150 Calls for $2.21 – Stock at 119.
Now what makes PLTR tough is the stock gave back a couple dollars of those Thursday gains on Friday, and option activity swung bearish, including this put buy:
Friday - Buyer of 7,000 Palantir (PLTR) May 105 Puts for $0.65 – Stock at 117.
Moving on …
In terms of stocks on my radar because of strong reactions to earnings…
GE continues to impress as the stock is near its 52-week high following earnings two weeks ago.
TOST rallied 11% on earnings Friday and is nearing its 52-week high.
LYFT stock has had many starts and stops, but in the short term at least the stock gained 27% on earnings Friday.
BSX has held most of its earnings gap from two weeks ago despite its peers coming under pressure last week.
Volatility and What Traders are Saying
The Chicago Board of Options Exchange Volatility Index (VIX) closed the week at 22, or modestly lower on the week.
And via @CharlieBilello on X the 50% decline in the VIX over the last four weeks is the second biggest volatility crash in history (and typically that kind of VIX compression leads to big market returns in the months to come, as noted below):
Option Order Flow was fairly mixed to bullish this past week as my Options Barometer came in at:
Monday – 5
Tuesday – 5
Wednesday – 5
Thursday - 6
Friday – 6
Events for the Week to Come
Tariffs will continue to push and pull the market this week, though traders will also be interested in Inflation Data via CPI on Tuesday and PPI on Thursday.
On the earnings from it is a somewhat slower week, though traders will be watching for quarterly results from Sea (SE) and JD.com (JD) on Tuesday, Cisco (CSCO) on Wednesday, and Alibaba (BABA), Applied Materials (AMAT), Deere (DE) and Walmart (WMT) Thursday.
Open Positions
Freeport-McMoRan (FCX) November 43 Calls – FCX was mostly unchanged last week, though it’s bid above 40 this morning on potential positive trade developments. And of note, option activity was very bullish in the stock late last week including these trades:
Friday - Buyer of 10,000 Freeport McMoRan (FCX) June 40 Calls for $1.26 – Stock at 37.5
Thursday - Buyer of 10,000 Freeport McMoRan (FCX) November 50 Calls for $1.25 – Stock at 38.
Grab Holdings (GRAB) January 5 Calls – GRAB continues to flirt with the 5 level, which has been a major wall in the last three weeks. And while the stock hasn’t yet busted above 5, option activity has been very bullish.
Marvell (MRVL) June 115 Calls – MRVL is still a lost cause as the stock would need to make a monster move in the next two months to get above the 115 strike, which is highly unlikely with so little time until expiration.
Financials ETF (XLF) June 50 Calls – The XLF is indicated well above the 50 level this morning as the stock has rallied nicely from its early-April lows. A run at its 52-week high isn’t that far away.
Starbucks (SBUX) January 110 Calls – SBUX mostly chopped around last week. My patience is running out on this trade, though I would note our calls don’t expire until January.
Robinhood (HOOD) December 50 Calls – HOOD stock looks fantastic and call activity has been wildly bullish since earnings two weeks ago. I have very high hopes for this trade.
Of note, the more closely I watch HOOD stock and this call buying activity, the more convinced I become that HOOD somewhat moves closely with crypto/bitcoin (for better or worse).
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