April 29, 2025
Grab Announced Earnings
Unbeknownst to me and my various trading platforms, Grab (GRAB) reported earnings this morning. The good news is the stock is trading marginally higher after reporting quarterly results, and is now at its highest level since last the earnings cycle when we bought our calls (the stock is just short of $5).
As I’ve been saying for weeks, I think GRAB looks great compared to the market, and option activity has remained bullish throughout and continues to be today.
And while Grab’s earnings were good, Starbucks’ (SBUX) were bad, and in reaction to those numbers the stock is trading lower by 6% today. Let’s see how the stock trades in the days to come, but unless things change dramatically soon, I may be looking to exit this trade.
Though of note, into the sell-off a trader bought these calls this morning:
Buyer of 10,000 Starbucks (SBUX) September 80 Calls for $6.15 – Stock at 79.
April 29, 2025
Starbucks (SBUX) Earnings and Interesting 2027 Call Buyer
Starbucks (SBUX) will report earnings today after the close. Headed into the event SBUX stock has been under pressure much like most of the market, though it has bounced approximately $5 from the lows.
I am going to hold my position through earnings as there is so much time until January expiration. Though I would note, I’m not thrilled that SBUX shares have not bounced more meaningfully as of late with the market.
SBUX – With the stock trading at 84, the options market is pricing in a move of $6 this week, or 78 to the downside and 90 to the upside.
Open interest is skewed bullish on a ratio of 1.2:1 call vs. put.
Skew is pricing in typical downside fear and upside interest.
Moving on …
The last four trading days a trader has been accumulating big premium call positions ranging from $8-$15 million in a variety of stocks looking for a big move higher into 2027. Here are those 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
Because all of these trades are targeting June of 2027, and all the premiums are somewhat similar, it’s not too hard to deduce that this is one trader/fund/institution.
And if I were looking to play a similar call buy targeting the Nasdaq ETF (QQQ), which is trading at 473 and which would best represent these call buys above, I might look at this trade:
Buy to Open the QQQ June 475 Call (exp. 2027) for $84.
April 28, 2025
Weekly Update
After an ugly start to the week on Monday, stocks rallied very impressively as the S&P 500 gained 4.6%, the Dow added 2.5% and the Nasdaq surged higher by 6.7%.
Stocks on Watch and What Traders are Saying
While Wall Street has been very quickly lowering their year-end targets for the S&P 500 the last several weeks amidst the tariff turmoil, very interestingly option activity has swung quite bullish of late, as my Options Barometer registered back-to-back days of “7” on Thursday and Friday. But first, via Yahoo Finance, here is a look at the S&P 500 target cuts, then the bullish option activity:
Friday:
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 11,500 Nvidia (NVDA) October 105 Calls for $17.05 – Stock at 108
Thursday:
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
Buyer of 1,000 Palantir (PLTR) May 115 Calls and Sale of May 85 Puts – Stock at 107 (bull risk/reversal)
Buyer of 5,000 Uber (UBER) October 105 Calls for $2 – Stock at 79
I like everything about the call buying above as traders are targeting moves higher in leaders such as PLTR/NVDA and UBER this year, as well as longer-term call buying in ARM/MSFT/ LLY/AMZN/GOOGL out to 2027 via big premium call buys of $8-$12 million.
These call buys, and the VIX bleeding lower (noted in the Volatility section), have me encouraged.
Volatility
The Chicago Board of Options Exchange Volatility Index (VIX) closed the week at 25, which is the lowest level since the administration announced tariffs approximately three weeks ago. And while this is hardly an all-clear for the market, encouragingly the VIX has somewhat stopped surging higher on bad days like Monday (it was higher, but only marginally so).
Option Order Flow was fairly mixed this past week as my Options Barometer came in at:
Monday – 5
Tuesday – 5
Wednesday – 5
Thursday - 7
Friday – 7
Events for the Week to Come
Much like the last three/four weeks the likely biggest driver of market movement this week will be tariff news and rumors. However, traders will also be paying attention to GDP on Wednesday and the Jobs Report on Friday.
On the earnings front, things are starting to heat up this week, as traders will get a good look at a variety of stocks and sectors including UPS, SPOT, VISA, SBUX on Tuesday, CAT, MSFT, META, HOOD on Wednesday, MA, MCD, BAX, AMZN, AAPL, RDDT, ABNB on Thursday and XOM, CVX and APO on Friday.
Open Positions
Freeport-McMoRan (FCX) November 43 Calls – FCX had a very strong week as the stock rallied ahead of earnings and continued its move post earnings, finally closing the week with a gain of 14%. This is an almost pure play on the world economy strengthening this year.
Grab Holdings (GRAB) January 5 Calls – I had been saying for weeks that GRAB was holding up very well despite the market meltdown, and last week the stock re-emerged as the market strengthened with a gain of 17% on the week. Also of note, option activity was very bullish all last week.
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 had a nice week and once again looks potentially on the road to recovery. Essentially, we need the market to continue to move higher as the XLF will move very closely with the indexes.
Starbucks (SBUX) January 110 Calls – SBUX had a “meh” week ahead of earnings Tuesday after the market close. These earnings will be a major driver of whether we stay in this position longer term.
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