Swipe those Credit Cards
Notable Flow 11/6
If you were positioned properly, today is likely one of your best days in the market thus far YTD. Absolutely unreal gap and go action we see today providing gains across most markets. Let’s look at what we have next.
Notable Flow:
VRT 0.00%↑ 125C 12/20 Exp.
DXCM 0.00%↑ 58P STO 12/13 Exp.
GLOB 0.00%↑ Put Debit Spread: 210P BTO & 190P STO 11/15 Exp.
V 0.00%↑ 320C 01/17/2025 Exp.
VRT 0.00%↑ 125C 12/20 Exp.
Vol: 3,139 OI: 994 Avg: $6.10 Prem: $1,913,693
This trade occurred on the floor of an exchange, with over 3k contracts traded at the Ask and almost $2 million in premium paid. This is the second day in a row that the call net premium has spiked, exceeding $2 million yesterday and seeing around $1.7 million today.
The stock continues to trade well above both its 50-day and 200-day moving averages, indicating strong bullish momentum. The current price represents a 21.25% premium over the 50-day moving average and a substantial 39.70% premium over the 200-day moving average. This market environment is beneficial to names trading in blue sky breakouts assuming we keep the momentum going in the broader markets for weeks ahead.
DXCM 0.00%↑ 58P STO 12/13 Exp.
Vol: 9,276 OI: - Avg: $0.54 Prem: $500,903
This whale is trading an options chain with no previous open interest. By selling over 9k contracts on credit, the trade is being sold to open. This trader speculates that the stock price will remain above $58 by expiration, making the contracts expire worthless, and the trader can collect the premium once the trade is closed.
Interesting idea here. With the launch of Stelo, the first over-the-counter glucose biosensor in the U.S., this opens up new market opportunities for DXCM. Analyst consensus remains "Buy" with a price target of $101.29, suggesting a potential upside of 44.85%. Pretty aggressive floor put in at 58. Ideally we break above that near term resistance level of ~78 and head back into that large range with momentum towards 100.
The Moving Average Convergence Divergence (MACD) indicator stands at 0.28, suggesting a potential buy signal, but this conflicts with other technical indicators…
GLOB 0.00%↑ Put Debit Spread: 210P BTO & 190P STO 11/15 Exp.
This trader is placing a bearish bet on the stock using a multi-leg strategy called Debit Spreads. The 190P is being sold on credit, and part of that credit is used to buy the 210P. With 1.5k contracts traded on each chain with a net price of $5.15 x 100 per contract, the whale is paying a total of $772,500 for the whole trade, and the profits will cap at $14.85 x 100 per contract if the trade works for this whale.
Recent analyst actions have been mixed, with UBS downgrading the stock to Neutral from Buy, suggesting some caution in the market. This could suggest some short term downside as investors look to park their cash elsewhere in the meantime as it seems on the verge of trading below the significant moving average’s. Outside of this, I can’t really make a full on bear case for the stock given the short time expiration and chart look, however, sometimes people just know.
V 0.00%↑ 320C 01/17/2025 Exp.
Vol: 1,359 OI: 955 Avg: $4.19 Prem: $568,944
This trader is adding calls to a chain with a high OI. If we are right about this trade, the new OI should update tomorrow to somewhere close to 2.5k. Visa stock is up over 4% today after HSBC and Daiwa Securities set price targets at $289 and $305 a share.
Strategic acquisitions and partnerships in areas like open banking and real-time payments are expanding Visa's ecosystem, potentially opening new revenue streams. With favorable analyst sentiment, a "Strong Buy" consensus, and technical strength indicated by trading above key moving averages, Visa appears poised for continued growth. While risks such as regulatory challenges and fintech competition exist, Visa's dominant market position, innovative approach, and solid financials make it an attractive option for investors bullish on the payments sector heading into early 2025.
Looking at the chart, we notice yet another breakout from a flat top with most banking related services rocketing off the election results from last night. Struggling with 288 in recent weeks, we finally break thru this level with strength in search of continued momentum in an aggressive bull market trend.
Thanks for joining us and we hope you enjoyed it per usual! Our favorites from today’s read are V 0.00%↑ and VRT 0.00%↑ as they have the cleanest look and solid momentum. If you enjoyed the article, likes are greatly appreciated.
Cheers folks,
Kian, Jersace, & Jon