100,000 Call Option Bet on $SPY to 615
As earnings season kicks off, players are making their bets.
Last week, we discussed the wealthy retail trader who went massively long Nvidia calls. On the very same day, an institution opened a huge upside position in the $S&P 500 ETF ($SPY)$:
$SPY 20241220 615.0 CALL$ - 100,000 contracts traded for $32.5 million in premium.
For context, index options see more muted moves compared to single stocks, so large flows typically involve spreads and hedges rather than outright directional bets.
An outright 100,000 contract call purchase of this magnitude is quite unusual.
And the block-size confirms this as an institutional order rather than a retail trade.
Friends, I won't mince words - the driver has his foot on the accelerator. Brace for volatility, but make sure you're strapped in and holding on to your positions.
With that $SPY$ flow, many outstanding questions resolve themselves, such as whether Tesla will continue dropping and how low it could go.
As long as the broader uptrend persists, even laggards will quickly play catch up. Musk won't let Tesla miss out on any bull market party.
For Tesla, I'll keep it simple - stock + sell $200 puts + sell $240 calls.
Institutions also rolled their $225/$237.5 covered call positions higher last week on $TSLA 20241018 225.0 CALL$ and $TSLA 20241018 237.5 CALL$ . Expecting some softness in Tesla's stock this week, making put sales attractive.
While someone bought a large put position in $STMicroelectronics ($STM 20241018 27.0 PUT$ ) last week, it's unlikely to have a major directional impact on Nvidia at this stage. Nvidia has transcended being just another semiconductor name - perhaps a dip would be welcomed by those who've missed the move.
Based on current positioning, Nvidia's expected trading range for this week is $120-$145.
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