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), which opened today at $61.44.
Looking Back on Noteworthy Options Activity in DraftKings Inc. (DKNG)
In an effort to continue analyzing and watching this unusual activity unfold, this is an update on the story thus far with more noteworthy or significant unusual option and dark pool trading activity today, September 7th, 2021.
As previously reported, there were bid-side puts and the ask-side calls traded in lots of 35,000 orders on July 16th, 2021. The calls were traded at the ask and the puts were sold at the bid, represented an overwhelmingly bullish strategy.
When these contracts were opened in July, 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 effectively means the traders involved were given a credit (as in collect premium, or were paid) to take on this trade.
At the time of this writing, the $40 strike put option is traded at a bid-ask spread of $0.10 to $0.11, meaning approximately $10,640,000 premium has been secured thus far; the $60 strike call option is being traded at a bid-ask of $5.80 to $5.90, resulting in $16,800,000 profit. Together, this strategy has $27,440,000 of profit, or an approximate 417% gain from its credit collected at open, or another 100% since the time of our last report.
Today’s Unusual Options Activity in DraftKings Inc. (DKNG)
Seen above, today’s flow would be considered bullish. There were 69.6% ask side whale positions taken and 98% of today’s options volume were in calls. 60.8% of the premium was bullish, with $4,650,574 calls purchased and $2,327,112 calls sold. Of interest, 272,320 of the volume were in contracts with a weekly expiration, or about 5.8% of the ask-side volume.
Seen above, the majority of betting today was on the September 17th, 2021 expiration, with $106,963,202 premium traded. The most active strikes today were at the $60 price, amounting to $79,059,758 in bullish premium; the same strike amassed $40,235,904 in bearish premium.
The above chart shows DraftKing's price, in blue, since around June 24th, 2021; call volume is represented in green, put volume in red, and open interest in yellow. Today’s call volume jumped significantly to 260,754, from Friday, September 3rd’s volume of 106,729. DraftKing has an average 30 day call volume of 125,100, so this represents a 208% increase over the mean.
Today’s Unusual or Noteworthy Dark Pool Activity in DraftKings Inc. (DKNG)
Today, on the Unusual Whales dark pool flow, there were a series of noteworthy units traded on the dark pool, seen below.
Most noteworthy, of course, is the $19,000,000 trade at a settled price of $63.58; it is not apparent which direction this trade was based on, but it was of 291,000 units, which accounted for 30.39% of today’s total dark pool volume on DraftKings, Inc. There were additional orders in large lot sizes, as seen, and a large portion were notated as buy orders, or even above ask (“AA”) buys, representing a bullish trend in the dark pools.
Seen above are DraftKings’ dark pool volumes, in gray bars, with its price as a blue line. Unusual dark pool activity amounted to over 959,174 units traded today, September 7th, 2021. The previous high on the dark pool was of our last report, the 1,203,965 on August 31st, 2021.
We will continue following DraftKings as this trade unfolds and reporting on its unusual options activity and dark pool volumes. Just to memorialize this particular trade, below are the orders from the Unusual Whales Flow seen below, which alerted to this strategy on the day of execution.