Unusual Options Activity in Workhorse Group Inc. (WKHS)
Today, October 12, 2021, in the Nasdaq Capital Market (NasdaqCM), we saw unusual or noteworthy options trading volume and activity in Workhorse Group Inc., which opened at $6.04.
These orders came together as a part of a cross trade and a part of a multi-leg stocks or options strategy. While these orders came in together, it is presumed they are a part of a larger strategy, such as rolling options or holding underlying shares at a more entertaining spot price.
- There were 33,250 contracts traded on the $5 strike put option at the ask, dated for November 19th, 2021.
- Additionally, there were another 33,250 contracts traded on the $4 strike put option at the bid, for the same date, representative of a vertical put debit spread.
- Finally, there was an additional leg of this strategy, 33,250 contracts traded on the $6 strike put option at the ask, dated for October 15th, 2021.
- Altogether, these orders represented approximately 9,975,000 shares and $2,197,000 of premium traded.
This strategy, as presented, has a 21.2% probability of profit, with a cost of entry of $1,296,750, which also represents this strategy’s maximum risk. This strategy has a maximum profit potential of $21,974,925 if and only if Workhorse Group Inc. ends at $0, with a breakeven at $5.85 at expiration.
Ergo, as always, it is presumed there are more orders, such as but not limited to trades of shares, included in large whale orders such as these. Follow the Flow!
These orders come in after reports from Reuters on September 30th, revealing that two of its [Workhorse Group Inc.’s] top executives, including finance chief Steve Schrader, have left the company, just a week after it suspended deliveries of its flagship C-1000 electric van.
As of this writing, WKHS has 122,976 puts traded which is 872% greater than its 30 day put average.
Unusual Options Activity in MercadoLibre, Inc. (MELI)
In the market capitalization-weighted index NASDAQ Global Select Market Composite (NasdaqGS), we saw unusual or noteworthy options trading volume and activity today in MercadoLibre, Inc., which opened at $1,472.98.
These orders were possibly related, having came in together, and represent a vertical call debit spread:
- There were 160 contracts traded on the $980 strike put option at the bid, dated for December 17th, 2021.
- Additionally, there were another 160 contracts traded on the $1000 strike put option at the ask, for the same date, representing a put debit spread with the above order.
- Furthermore, there were 160 contracts traded on the $1980 call option at the ask, for the same date.
- And finally, there were 160 contracts traded on the $2000 call option at the bid, again for the same date, representing a call debit spread with the above order.
These orders, while they came in together, represent a reverse iron condor, only profitable once one of the wings are broken, which makes this highly unusual or noteworthy; with this strategy alone the trader would take on an approximate 11% probability of profit, albeit only risking $2,400 of capital to enter into the positions.
These orders come after MercadoLibre having launched its own blank check company in a $250 million IPO.
On the December 17th, 2021 expiration, there is now approximately $14,913,471 bullish premium traded, in green, over bearish at $8,590,944; the $1500 strike is represented by $8,381,777 bullish premium, over bearish at $4,046,088.
Unusual Options Activity in JPMorgan Chase & Co. (JPM)
Finally, within the underlying components of the NYSE, we saw unusual or noteworthy options trading volume and activity today in JPMorgan Chase & Co. (JPM), which opened at $165.75.
These orders come in just before JP Morgan Chase & Co.’s earnings report tomorrow, October 13th, 2021.
As seen, bearish premium at these levels represents 97.5% of the options order flow. 60.3% are bid-side option trades with 58.9% being calls.