Hello all, market a little drippy today yet small caps seem to be resilient and outperforming. Let’s peak into the flow pull.
Notable Flow:
CNX 0.00%↑ 30P 01/17/2025 Exp
RRC 0.00%↑ 33C 03/21/2025 Exp
CZR 0.00%↑ 44P STO 11/15 Exp
NOVA 0.00%↑ Call Debit Spread: 7C BTO & 10C STO 11/15 Exp.
CNX 0.00%↑ 30P 01/17/2025 Exp
Vol: 48,751 OI: 37 Avg: $1.17 Prem: $5,706,247
It's a big bearish bet on a chain with only 37 OI. Today, almost 50k contracts were traded on it, the highest options volume in the past 90 days. Last week, there was unusual activity for the 40C 04/17/2025 Exp, which was profitable by around 70% and still has an OI of 32.7k. Seeing this high-put activity today is sending mixed signals. Our only context is that the company will report earnings on 10/24 when investors expect an EPS of $0.321 and revenues of $385.561.
We can look at the STD channel here and likely come back to this at a later date using this as an example of how this indicator can truly be effective. Above the entire channel by over 8% at the moment, a pullback seems likely. Not only this, but the company also reports their quarterly earnings in 9 days time. Explosive move up, above STD channel, and upcoming earnings could provide this trader the weakness and pullback they desire.
RRC 0.00%↑ 33C 03/21/2025 Exp
Vol: 2,409 OI: 293 Avg: $1.70 Prem: $409,927
Over 2k contracts were traded at the Ask on this chain. The stock had its highest call buying in the past 30 days and its highest options volume in the past 14 days. The company will report its 2024 Q3 earnings on 10/22, with an expected move of +/-8.1%. Analysts estimate an EPS of $0.416 and revenues of $629.163 million.
Essentially risking the 10-wk MA and the lower half of this STD channel, this trader looks to buy the dip as the asset has dropped nearly 10% over the previous two weeks. Energy names and more specifically oil names have become increasingly popular this past month with many notable zones across the entire sector. RRC is certainly a less popular trade but provides decent risk/reward ratios here. Look for reclaim of the overhead moving average’s for this trade to work with plenty of time behind the idea.
CZR 0.00%↑ 44P STO 11/15 Exp
Vol: 4,009 OI: 400 Avg: $1.75 Prem: $700,964
This Whale traded 4k contracts at the Bid, accounting for almost all of the daily volume on this chain. The trader received a $700k credit for 4k contracts with a 1.75 average per contract. The contracts will expire worthless if the stock is above $44 by the expiration day. The trader can collect the premium received and close the trade for profits.
Having previously broken out of a long term downtrend amid the most popular season for sports bettors, CZR looks to be entering untapped range with strength. Names such as FLUT and DKNG have also been on decent runs lately as part of this theme. Caesar’s is one of the largest casino & entertainment corporations out there which bodes well for the industry when they perform well. Surfing the 10DMA, this trader looks for continued upside above the pivotal resistance level of 44-45.
NOVA 0.00%↑ Call Debit Spread: 7C BTO & 10C STO 11/15 Exp.
This trader is buying around 9.4k contracts of the 7C and selling around 9k contracts of the 10C. Paying an Avg of 0.6 for the 7C and receiving an average credit of 0.15 per contract on the 10C. The trader is paying a total of 0.45 per contract, which is about $423k for the trade.
Similar idea to what I was talking about earlier in regards to how these STD channels work except this one is trading below the channel currently into previous support. Sharply declining moving average’s display heavy selling pressure but perhaps this solar utility company has some good news on the horizon. Their next earnings report is in the later half of next week. An ideal move off the report would be a decent bounce from here while maintaining price below 10 to collect premium.
Alrighty folks - that’s all for us today. Take care and brush your hair. May the odds be ever in your favor. If you enjoyed the read, likes are greatly appreciated.
Cheers,
Kian, Jersace, & Jon