China and Casinos
Notable Flow 11/5
Happy Election Day - sips bourbon. As we head into the remainder of this week with loads of uncertainty, election bets continue to pile in, and volatility increases with each moment until the decision is made. Let’s take a peek at the basket for today.
Notable Flow:
BPMC 0.00%↑ 95P STO 12/19/2025 Exp.
CZR 0.00%↑ 32P STO 01/17/2025 Exp.
FXI 0.00%↑ 34.5C 11/15 Exp.
WB 0.00%↑ 24.2C 01/16/2026 Exp.
BPMC 0.00%↑ 95P STO 12/19/2025 Exp.
Vol: 1,322 OI: - Avg: $13.60 Prem: $1,797,920
This Whale is placing a bullish trade by selling over 1.3k contracts of this chain and receiving almost $1.8 million on credit. If the stock price remains above $95 by expiration, the contracts will expire worthless, and the trader will be able to collect the premium for profits.
BPMC reported impressive Q3 2024 results, beating both earnings and sales estimates:
Adjusted loss of $0.89 per share, narrower than expected $0.97 loss
Revenues of $128.2 million, surpassing estimates of $126 million
127% year-over-year revenue growth
While specific chart patterns are not clearly visible, the stock has gained 49% over the past year, outperforming its industry peers, and is currently coming into a pivotal price. Above 95, we see gaps above 100 and a range from there to 109. The company's flagship drug, AYVAKIT, continues to drive growth, with sales increasing 136% YoY.
CZR 0.00%↑ 32P STO 01/17/2025 Exp.
Vol: 20,022 OI: 2,242 Avg: $0.56 Prem: $1,121,270
This trader speculates that the stock price will remain above $32 by expiration. Ceasars Entretaiment Inc. shares plunged 15% since it announced its 2024 Q3 earnings, missing analysts’ expectations in EPS and Revenues. The company reported a GAAP net loss of $9 million compared to net income of $74 million for the comparable prior-year period. Despite the negative results, this trader sold 20k contracts of these puts on credits and will be able to collect the premium if the contracts expire worthless.
Investors should monitor upcoming catalysts, including the potential opening of Nobu Hotels Caesars in New Orleans and the planned Virginia property launch by the end of 2024. Additionally, keep an eye on the company's continued efforts to strengthen its digital portfolio and reduce debt. The strike chosen here of 32 correlates to the most recent supportive level and can be thought of as a “floor”. The range between 35-44 has typically been the zone all year long. Ideally, CZR reclaims the moving average’s above and builds solid support into the EOY with NFL and CFB seasons in full swing gathering more bets via their sports betting platforms into early ‘25.
FXI 0.00%↑ 34.5C 11/15 Exp.
Vol: 14,441 OI: 1,530 Avg: $0.41 Prem: $592,589
This options chain had unusual activity at 11:20 a.m. ET when a trader opened 12k contracts, paying almost $500k for a trade that expires in 10 days. This is potentially short-term speculation about the upside of the Chinese stock market. Maybe the trader is betting on the US election results to impact the China Large-Cap ETF.
Several factors support a positive outlook for FXI in the coming week:
Government Support: China's government has been actively buying Mainland stocks to stabilize the domestic market, with increased transparency about these purchases
Economic Recovery: Q1 2024 GDP came in at 5.3%, surpassing estimates of 4.8% and showing a 1.6% improvement from Q4 2023
Policy Measures: The State Council issued "9 Key Points" to improve China's capital markets, including initiatives to control IPO supply and encourage dividend payments
Attractive Valuations: Many Chinese companies are engaging in stock buybacks, particularly in the internet sector, due to low valuations
Improving Earnings: 3 and 5-year EPS growth estimates for internet and E-Commerce companies within the MSCI China Index are trending upward.
To pair with all of this information, China's top legislative body is meeting from November 4 to 8, with analysts anticipating potential fiscal stimulus announcements as well as the U.S. FOMC this week. The chart has a great look to it as well from a technical standpoint with the 50/200DMA’s suggesting buyer momentum with shorter term moving average’s such as the 10/20’s also providing supportive trends. Look for a break of 33 and potential overnight China news.
WB 0.00%↑ 24.2C 01/16/2026 Exp.
Vol: 5,529 OI: 868 Avg: $0.42 Prem: $233,776
This trader is placing opening calls on a chain that is 161% OTM and expires in 437 days. The strike at first seems outrageous, but considering how much time they have, it could work out and pay the trader a good amount if it works. This is the highest options volume that the stock had in the past 14 days.
We look towards the weekly chart here and notice the converging moving average’s after an explosive few weeks leading to the recent cool off from the breakout move. Resting atop the 10/20/50wk-MA’s, WB seems poised for another leg up with their upcoming earnings report in 14 days. As we approach January 2026, Weibo's strong user base, financial stability, and strategic initiatives position it well for potential growth. The company's focus on digital innovation and AI integration could be key drivers for long-term success. However, investors should closely monitor regulatory developments and broader economic factors that could impact Chinese tech stocks.
China is long overdue for continuation, and it seems as though the whale’s are betting on this sort of action here today.
Thanks for joining us here today and we hope you guys enjoyed it. Go out and vote, if you are eligible, and enjoy the frantic panic of others who concern themselves over such a thing. We will continue to provide our input on other traders ideas regardless. If you enjoyed the article, likes are greatly appreciated and we will see you all again soon.
Cheers,
Kian, Jersace, & Jon