To The Moon

With the AI-related hardware reaching new highs after $NVIDIA Corp(NVDA)$ financial report and the high-priced Apple Vision Pro following $Apple(AAPL)$ WWDC, the technology industry, which has performed relatively well this year, is waiting for the next hot topic to take over.

Meanwhile, performance disparities continue to appear between sectors and industries, with the financial and banking sectors performing well on June 6th, while consumer sectors remain divided. However, there have also been changes in investor confidence due to some unusual options activities. Here are the top 20 unusual options on June 6th:

Here’s Some Notable Unusual Options

$DLocal Limited(DLO)$ , a South American payment company that was shorted by Muddy Waters at the end of 2022 but initiated a buyback in 2023. At the end of May, the stock experienced a significant drop due to an investigation by the Argentine government into alleged "improper operations in the foreign exchange market and remittances." The large call option in question corresponds to the previous platform and is likely a covered call, considering its distance from the current price. It is believed that the stock has reached its previous high, which was likely the limit of its rebound over the past two months.

$Coinbase Global, Inc.(COIN)$ Several options related to Coinbase experienced unusual activity yesterday, which is not surprising considering the recent focus of the SEC on the cryptocurrency industry. Both COIN and Binance have been spared, but mishandling the situation could be a devastating blow to the industry. The unusual options activities yesterday were concentrated on near-expiry end-of-week options and very close to the at-the-money strike price. If these are covered options, it implies that investors may find it difficult to expect a rebound to around $55 over the weekend, and they would be willing to sell at this level if an opportunity arises. If it's a large buy call option, there is a possibility of speculating on a rebound in the next two days.

$Dick's Sporting Goods(DKS)$ The two large put options on Dick's Sporting Goods (DKS) appear to be from the same trader since the company's usual trading volume is not significant. On June 6th, the overall sports brand industry saw some gains, with only one positive merger news related to the golf industry. DKS received favor as the company's valuation is not high (around 10 times PE), so selling near-the-money puts with an IV of about 35% for a duration of around two months is a relatively bold choice.

$Oracle(ORCL)$ The call option with a June 30th expiration date for Oracle (ORCL) is priced at $115, which is only about $8 away from the current price of $107. It is worth noting that Oracle's earnings report is scheduled for June 12th. Considering that the company's stock price has also risen significantly along with the entire software industry, this investor's expectation is an increase of around $8.

$Lyft, Inc.(LYFT)$ has recently recovered from a major drop in its financial report. The most significant news is the announcement of a new CFO and an upward revision of the full-year forecast, indicating a clear strategy. It is uncertain whether the consumer sector will face macro headwinds in the future, but LYFT has consistently performed worse in its financial reports compared to UBER, so it does need some changes. The end-of-day put option expiring on June 9th is likely an investor's attempt to accumulate positions around $10 and reduce costs.

$Apple(AAPL)$ generally doesn't engage much in unusual options activities, but this particular June 23rd expiring $177.5 CALL option is indeed worth everyone's attention. Firstly, the strike price is quite conservative, currently at $179.21, making it an in-the-money CALL. There are few buyers for large-sized CALL options, especially for those expiring in just half a month, as time value decay is significant. Additionally, Apple has recently released a VR product, so there's no need to speculate on any upcoming news in the next two weeks. Therefore, it is more likely that this position represents a covered call option held by an investor who believes in a potential pullback in the near future, choosing an in-the-money covered call option that is not far from the current price.