Trade breakdown and how to follow an options trade using Unusual Whales
As part of our free weekly educational series
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Hey all,
This is the Unusual Whales Team, and we are going to spend every Wednesday walking you through some trades of the week for free to help your trading!
In today’s issue, we’re going to cover an options trade that spanned over a month. We watched our trader enter way back in mid-March, hold through weeks of chop, and possibly even add to their position recently in April.
Before I get started with the trade breakdown, Unusual Whales just partnered with tastytrade to get the biggest deposit bonus possible for all our readers. Get $50-$5000 when you open a new account with tastytrade.
The trade we’re tracking today began its journey back on March 15th, 2024, found originally by Unusual Whales Affiliate, AnthonySandford.
At 9:30 am Central time on 3/15/2024, a single order for 3,140 contracts of the Boston Scientific Corporation, $BSX, $67.5 Call contracts expiring on May 17, 2024 hit the tape. These contracts filled ask-side at an average of $2.17 per contract within a bid-ask spread of $2.10 - $2.20.
As you can see in the image above, the Open Interest on the contract was only 1,072; this means that we’re looking at a confirmed “Opening Trade”, as the SIZE of that single order was nearly 3 times the amount of contract already open; so it couldn’t have been a CLOSING trade.
Here we can visualize their entry on the Contract Overview; see the massive green bar notating the order? In addition to the low OI versus the size of the trade, we were able to confirm that this trade stayed open. No volume followed, so we could have been pretty sure intraday that the trade stayed open, but the following trading day on Monday March 18th, we saw the open interest rise by 3,120. Our trader stayed in their position through the weekend.
When the trade initially opened, $BSX traded at $66.52 per share. Over the few weeks that followed, our trader stayed around between breakeven, and +$1.00 per contract as $BSX ranged between $66.77 and $69. The contract reached a new high of $3.30 on April 4th, but our trader didn’t close their position.
As we delved deeper into the month of April, the $BSX earnings report was right around the corner. Generally, earnings plays can be risky due to volatility; however, our trader entered this trade well over a month before the report; to me, that made it worth tracking. On April 22, 2024, two days before the earnings report, we caught yet another set of large orders on the contract.
5,000 contracts transacted ask-side within a bid-ask spread of $2.00 and $2.15, at a fill of $2.10 per contract.
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Back to the trade!
On April 24th, $BSX reported their quarter 1 earnings. They reported an Earnings per Share of $0.56 versus an expected $0.51 – a 9.14% beat. For Revenue, they reported $3.86 billion over an expected $3.68 billion – a 4.65% beat.
On the report, $BSX jumped from $68.96 per share to a high of $73.97 overnight. The $67.5C 5/17/2024 certainly reflected this move.
On the morning of April 24th, 2024, the $67.5C 5/17/2024 reached a new high of $7.10 per contract. If you recall, the initial cost of entry was $2.17, followed by another order on 4/22 at $2.10; but for the sake of ease, let’s use the original entry, here.
Our trader held their position for nearly 6 weeks, and their patience paid off with a +227% gain. At the time of writing, this position remains open, which we can see in the image above by noting the lack of volume following the earnings report.
To recap:
$BSX $67.5C 5/17/2024 | $2.17 → $7.10 | +227% in 5.5 weeks
Thank you as always for reading! I hope this article helps you understand how to speculate on options flow that suggests an intraday trade! Be on the lookout for more guides, walkthroughs, and Education on the Unusual Whales YouTube channel!
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NOTE: This post is not financial advice. The stock market is risky, and any trade or investment is expected to have some, or total, loss. Please do research before any trade. Do not use this information for investment decisions. Check terms on site for full terms. Agree to terms before considering this information.