Looking Back on Unusual Options Activity & Dark Pool Volumes in DraftKings Inc. (DKNG)

Looking Back on Unusual Options Activity & Dark Pool Volumes in DraftKings Inc. (DKNG)
Pictured, the cross trade seen in the Unusual Whales Flow on July 16th, 2021. The $40 strike put was sold at the bid and the $60 strike call was bought at the ask.

A Historical Review of a DKNG Trade Caught by the Unusual Whales Flow

On July 16th, 2021, in the market capitalization-weighted index NASDAQ Global Select Market Composite (NasdaqGS), we saw unusual or noteworthy unusual options volumes and activity in DraftKings Inc. (DKNG, opened today at $59.38).

The unusual option activity detected on July 16th, 2021 were 35,000 contracts traded on the $60 strike call option dated for October 15th, 2021, traded at the ask, and an additional 35,000 contracts on the $40 strike put option for the same date, traded at the bid.  When these contracts were opened, the $40 strike put option would have been sold at a premium of $288, with the $60 strike call option at $100, meaning $188 would have been collected for each one of the 35,000 contracts traded in this strategy, amounting to a credit of $6,580,000.

This strategy would have had a 67.9% probability of profit when opened, with an infinite upside and a maximum risk of $3811.90 per contract if DraftKings, Inc. closed at $0 at these contracts’ expirations.

At the time of this writing, the $40 strike put option is traded at a bid-ask spread of $0.13 to $0.14, meaning approximately $9,590,000 premium has been secured thus far; the $60 strike call option is being traded at a bid-ask of $4.15 to $4.25, resulting in $11,375,000 profit.  Together, this strategy has $20,965,000 of profit, or an approximate 318% gain from its credit collected at open.

Seen below are the orders from the Unusual Whales Flow, which alerted to this strategy on the day of execution.  You may also click here to view the Flow itself on unusualwhales.com.

Pictured, the cross trade seen in the Unusual Whales Flow on July 16th, 2021. The $40 strike put was sold at the bid and the $60 strike call was bought at the ask.

Yesterday and in the past week, on the Unusual Whales dark pool flow, there were a series of noteworthy units traded on the dark pool.

DKNG's dark pool flow.

This unusual activity amounted to over 1,203,965 units traded yesterday, August 31st, 2021.  The previous high on the dark pool was on August 6th, 2021, at 1,438,700 units.  Today, September 1st, 2021, there have been 454,702 units traded thus far.

DKNG's price, in blue, with its dark pool volumes as gray bars behind.

For further information on the unusual options activity of DKNG visit unusualwhales.com