Unusual Options talks? Why GOOGL on the list?
After the financial reports of major tech companies, we are now more than halfway through this earnings season. The most robust momentum of the tech companies this year has more or less subsided, and the upcoming focus will be on how various players maintain their profits achieved this year.
Looking at the market trends, Monday still retained a relatively optimistic outlook, yet the overall fluctuations weren't as significant as the previous week. Perhaps we'll have to wait until after the release of non-farm payrolls and employment data for the next strategic move.
As for unusual options activities, a substantial number of open orders are leaning toward being in-the-money, signaling a reduced level of market speculation. For instance, a substantial portion of open orders for $Apple(AAPL)$ are at the $180 strike price, causing rapid contraction on both sides. Similar trends are seen for $NVIDIA Corp(NVDA)$ and $Tesla Motors(TSLA)$
Slightly deviating from the norm, there are certain outliers such as the $Johnson & Johnson(JNJ)$ put options at the $210 strike price, currently yielding considerable profits with a substantial number of open orders. This suggests a possible continuation of bearish sentiment. This is partly due to Johnson & Johnson's prior decision to exchange a portion of their stock for $Kenvue Inc(KVUE)$ at a conversion price that could have been 10-20% lower than KVUE's market price at that time. This move attracted a large number of speculative arbitrage investors. Stocks that were not successfully converted or positions unrelated to Johnson & Johnson's non-KVUE business have led to the current selling pressure, which is anticipated to persist for a while.
$AMC Entertainment(AMC)$ although it has already dropped to $11 per share, it continues to show a downward trend.
On the other hand, among the high trading volume but low overnight open interest options, $Google (GOOG)$ takes a notable position.
Calls at around $142 with one month until expiry, mostly covered, suggest that while some investors are willing to bet on short-term upward movement for Google, others must be taking the opposing side.
Moving on, today's earnings report from $Pinduoduo Inc.(PDD)$ , one of the constituents of the $Nasdaq 100 Index (NDX)$, draws attention not only from Chinese investors but also from international ones. Unusual call activities are observed around $89 and $93, indicating a potential increase of 10-15% based on this range.
Lastly, I'd like to remind everyone that the recently hyped Vietnamese Tesla, $VinFast Auto(VFS)$ now also has options available, with option prices that are remarkably imbalanced and extravagant.
Companies listed through SPACs inherently possess highly concentrated chips, and the issue of overvaluation is not easily resolved within a few years. Therefore, for the controlling parties, stoking its popularity seems like a wise strategy to reap greater benefits.
Whether it's the bull side or the bear side, options carry a significant amount of time value to be redeemed, especially for the bear side. The price of PUT options has already reached unreasonable levels, indicating the market's belief that this round of upward momentum might not last for more than half a month.
But who can truly foresee?
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