Whale Watching: We're So Back
Notable Flow 01/06/25
Welcome back to Unusual Flow. The year is 2025, and people still trade stonks, gotta love it. Pretty outlandish basket today with absolutely zero correlation but that’s not what we’re here to do. What we are here to do is to report, and let you decide. Let’s dive in shall we?
Last week Jersace released his 2025 Juice List of his favorite setups heading into the new year including a variety of themes/ideas. If you missed that, you can find it here.
Don’t care to pay attention everyday? Luckily for you Kian has a Dub Invest portfolio where he does all the research, buying & selling for you. You can check that out here.
Notable Flow:
ABBV 0.00%↑ 165P STO 03/21 Exp
AA 0.00%↑ 45C 04/17 Exp
X 0.00%↑ 40C 03/21 Exp
SMCI 0.00%↑ 62C 05/16 Exp
BLKB 0.00%↑ Bullish Risk Reversal: 80C BTO & 70P STO 03/21 Exp
ABBV 0.00%↑ 165P STO 03/21 Exp
Vol: 10,067 OI: 1,956 Avg: $1.88 Prem: $1,890,024
This trader sold over 10,000 contracts on credit, making this a bullish position. The value of the contracts has been on a straight decline since 11/15/24 when they traded at $7.84. Today, they are trading at $1.88. If the trend continues and ABBV 0.00%↑ trades above $165 by the expiration, the contracts will be worthless, and the trader can close the trade for profits, collecting almost $1.9 million in premium.
Nice undercut and reversal of the 200D here. We also see a reclaim of the 50D as it now trades above all relative moving averages shown. Shortly above we’ve got a supply zone ranging from 184 to 186 and change. Entry atop these moving averages can be used as support while recognizing the near resistance levels discussed previously (supply). It is also worth noting the company reports earnings in just over 3 weeks (25 days).
AA 0.00%↑ 45C 04/17 Exp
Vol: 10,865 OI: 5,374 Avg: $1.20 Prem: $1,309,349
Shares are soaring today, and the stock is up over 3% despite Jefferies reducing its price target to $45.00 from $50.00 per share. Today, whales added almost 11,000 contracts to a chain with 5,374 in Open Interest, paying over $1.3 million. This call spike caused the Call Net Premium to reach its highest level in the past 30 days.
As the global push for clean energy technologies accelerates, demand for aluminum is expected to grow significantly. The chart seems to be attempting a short term bottom here off of 35 while trading below moving averages. With energy becoming a popular trade again, it remains to be seen how aluminum, among other non-energy minerals, fits the narrative. Traders can use Friday’s closing price as their risk with targets north of the nearest moving average’s as well as the next resistance level shown at 39 and change.
X 0.00%↑ 40C 03/21 Exp
Vol: 21,461 OI: 8,597 Avg: $1.25 Prem: $2,680,681
The stock has been experiencing unusual options activity lately due to the proposed Nippon Steel acquisition and the Biden administration blocks. Today, the stock is up almost 5% after Nippon announced it will hold a press conference on 01/07 to discuss its United States Steel Corporation acquisition. These whales positioned themselves bullish by adding over 21k contracts of these calls expiring in 74 days.
As traders and investors alike speculate a deal to be done or not to be done, we recognize the volatility that comes along with pending news. In this instance, the whale is betting on continued upside as we had a glimpse at a few sessions prior when X surged just over 13% in a day and ultimately closing +9.22% last Tuesday. From a technical look, it appears as though the asset is forming an island bottom as we gapped up off Friday’s close above the 10D with the 20D lurking just above. God speed news traders, let the numbers be in your favor as we await the press conference tomorrow.
SMCI 0.00%↑ 62C 05/16 Exp
Vol: 3,693 OI: 327 Avg: $3.38 Prem: $1,249,170
Whales did not hesitate to open over 3,000 contracts for these calls, paying $3.45, a contract above the Ask price. This trade took place within 10 minutes of the opening bell. This trader is optimistic and believes shares will continue to rise in the months despite the stock running over 10% today, following other semiconductors.
There is a lot to take in here. The stock has faced extreme volatility the previous few months as it came crashing down from ATH’s followed by accounting fraud allegations. The first hurdle was cleared with an in house audit claiming there was no fraud which ultimately held off the Nasdaq from removing the asset. While this remains to be seen from a third party audit, it still trades alongside the other semiconductors on most days while presenting appealing upside with potential good news looming. One of the more risky bets we’ve seen today however still appealing.
BLKB 0.00%↑ Bullish Risk Reversal: 80C BTO & 70P STO 03/21 Exp
This trader uses a strategy in which the 70P is sold on credit and used to buy the 80C. By trading 2,000 contracts on each option’s chain, the trader paid a net premium of $294k for this trade. The trader’s PnL will be positive if the stock trades above $80 by the expiration and negative if it trades below $70 by the expiration; between $70 and $80, the trader’s PnL will be at break even.
Marginally breaking out of a steep falling wedge, BLKB looks to be poised for positive regression as it rests upon the bottom of the standard deviation channel. Typically a good spot to punt a bullish risk reversal and/or go flat out long. Blackbaud reports their Q4 earnings mid February and traders interested in this flow should make note of that as it can make or break the entirety of the trade regardless of the risk at hand.
Coming to you once again, in the year 2025, Unusual Flow. We hope you enjoyed today’s basket and be sure to check back in the morning to see if the OI carries over. If you liked the read, likes are greatly appreciated. Let’s crush this new year, together.
Cheers,
