May 5, 2025
HOOD, and June 2027 Call Buyer, Updates
On Friday of last week, we added a position in Robinhood (HOOD) following a surge in call buying activity that day. And this morning, this bullish option activity is continuing as calls are outpacing puts on a ratio of 4:1, including these trades below:
Buyer of 5,000 Robinhood (HOOD) June 55 Calls for $1.73 – Stock at 46.5
Buyer of 10,000 Robinhood (HOOD) July 60 Calls for $2 – Stock at 47.5
I’m not sure what the play is for the non-stop HOOD call buyers as earnings have passed, but I’m certainly intrigued.
Moving on …
Today, the big June 2027 call buyer is again adding to his portfolio via these buys:
Buyer of 1,100 United Health (UNH) June 400 Calls (exp. 2027) for $89.30 – Stock at 402
Buyer of 400 Service Now (NOW) June 980 Calls (exp. 2027) for $250 – Stock at 985
Buyer of 700 ASML (ASML) June 690 Calls (exp. 2027) for $167 – Stock at 686
Buyer of 3,400 Advanced Micro Devices (AMD) June 105 Calls (exp. 2027) for $29.5 – Stock at 100
And this call buying follows big positioning the last two weeks, including these trades:
Buyer of 3,000 Pinduoduo (PDD) June 105 Calls (exp. 2027) for $30.60 – Stock at 104
Buyer of 1,000 Vertex (VRTX) June 500 Calls (exp. 2027) for $125 – Stock at 499
Buyer of 2,500 Arm Holdings (ARM) June 115 Calls (exp. 2027) for $39.50 – Stock at 111
Buyer of 1,700 Microsoft (MSFT) June 390 Calls (exp. 2027) for $71.60 – Stock at 387
Buyer of 500 Eli Lilly (LLY) June 830 Calls (exp. 2027) for $210 – Stock at 867
Buyer of 2,000 Amazon (AMZN) June 180 Calls (exp. 2027) for $43.70 – Stock at 182
Buyer of 2,200 Google (GOOGL) June 155 Calls (exp. 2027) for $37 – Stock at 157
So why is this trader targeting the June expiration cycle of 2027?
It’s actually a fairly simple answer … June of 2027 is the expiration cycle furthest out in time that is currently offered for options in most stocks.
It will be interesting to see how these big-premium call buys end up on expiration in June of 2027 (if I can remember to track these trades for two years!).
May 5, 2025
Weekly Update
The market continued its strong rebound from its early April lows as the indexes rose all five days last week. The S&P 500 gained 2.9%, the Dow rallied 3% and the Nasdaq advanced by 3.4%.
Stocks on Watch and What Traders are Saying
After a month of truly awful action for the market and somewhat “bleh” option activity, in the last two weeks the market has come alive and so has option activity in the market leaders, including these trades from late last week:
Buyer of 11,000 Microsoft (MSFT) August 450 Calls for $20 – Stock at 437
Buyer of 25,000 Amazon (AMZN) August 180 Calls for $21 – Stock at 190 (rolled from June calls)
Buyer of 26,000 Microsoft (MSFT) August 400 Calls for $48.25 – Stock at 432 (rolled from May calls)
Buyer of 11,000 Microsoft (MSFT) October 460 Calls for $20 – Stock at 432
Buyer of 5,000 Tesla (TSLA) May 300 Calls (exp. 5/30) for $15 – Stock at 291
Buyer of 16,000 Meta (META) May 600 Calls (exp. 5/9) for $12 – Stock at 600.
I really like the way MSFT responded to earnings, as well as the option activity in the stock and its Mag. 7 peers.
And while the price of MSFT options is expensive in dollar terms (the at-the-money December 435 calls are worth $42), if we wanted to play the Mag. 7 group the MAGS ETF that is comprised of those seven stocks does trade options, which are more fairly reasonably priced (the at-the-money December 48 calls would cost $5.50).
I’ll be evaluating trades in MSFT and the MAGS in the days to come.
What could push me into buying MSFT, MAGS, or any position is the combination of the market strengthening even in the face of bad news which has been the theme as of late, as well as the VIX bleeding even lower.
Though, if I were to caution just a bit about the recent market rally, stocks have ripped back higher and we often see the strongest of rallies in bear markets … but hopefully that isn’t the case this time.
Volatility
The Chicago Board of Options Exchange Volatility Index (VIX) closed the week at 22.5 which is the lowest level for the fear index since the tariff announcements in early April. The declining VIX, coupled with option activity that’s mostly bullish, is encouraging to say the least.
Option Order Flow was fairly mixed 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
The Fed Meeting on Wednesday is the big known event for the week, though as has been the case for weeks, tariff news and rumors will likely be the biggest driver of market movement this week.
While last week’s earnings lineup was full of the heavy hitters that comprise the Mag. 7, this week is mostly made up of stocks that I more closely watch including PLTR, UBER, APP, COIN, ARM, ANET, DDOG, DASH and more
Open Positions
Freeport-McMoRan (FCX) November 43 Calls – FCX gained 2% on the week and is shaping up nicely. As I’ve said in weeks past, trader deals getting done would likely be a very positive catalyst for FCX.
Grab Holdings (GRAB) January 5 Calls – GRAB rallied 2% last week and is once again trading just short of 5 and call buying continues to ramp very bullish. I have high hopes for GRAB if the market can stay in gear.
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 gained 3.2% last week and is now trading just short of our 50 strike. Earnings from all the leading financials have passed, which means the XLF will likely trade with the overall market and traders’ expectations for the strength or weakness of the economy.
Starbucks (SBUX) January 110 Calls – Despite initially falling on earnings, SBUX rallied nicely from the lows and finished the week higher by 1%. Option activity was overwhelmingly bullish following disappointing earnings, which is very interesting.
Robinhood (HOOD) December 50 Calls – HOOD is the newest addition to the portfolio following wild call buying on Thursday and Friday of last week. This stock is going to be extremely volatile which means there will be many ups and downs with this trade. That being said, this is a pure bull market play (with some crypto exposure as well) and if the market can make a run at its highs, HOOD should be a nice play on that.
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