Massive Options Buy in POT

[Steven Place]

I’ve been waiting for POT to breakout since November. I know this because I was stopped out a couple times.

It’s gearing up again, and this time it has some weight behind it.

 

The POT options board has traded 65k calls vs an average of 11k. Net deltas are very bullish, and much of the trading is focused on the Feb 33 call. Over 40k traded today on an open interest of 1800. The big print was 14k Feb 33 calls bought.

Now we’re a bit “late” to the game. IV is ramping up and the stock has already popped. So don’t go in massive size, but it’s still worth a directional bet.

I like buying the Feb 33 Call for .80-0.85. Assume full risk or a loss of the 50 day moving average to exit. If we ramp to 34, sell 1/2 and keep the rest for an earnings trade.

 

[Steven Place]

POT has now hit 34, so sell 1/2 at 1.65 and just let the rest run.

[Steven Place]

POT up on another massive day. It’s now officially “overbought.”

Sell Feb 37 Calls at 0.45 against your Feb 33 Calls to roll into a bull call spread.

[Author]

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