Unusual BNED Options, Nvidia/NVDA earnings breakdown, and Memorial Day Sale
As part of our free weekly educational series
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 some unusual options activity in Barnes and Noble Education, $BNED, that occurred in the days leading up to an astounding 150% pop in the stock price. We’ll also break down NVDA at the bottom of the newsletter before earnings.
Before we get to that, Unusual Whales is having a Memorial Day Sale!
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Today we’re covering flow in $BNED, which was originally mentioned by a user in the Unusual Whales Discord server.
User B-Rad noticed significant activity on May 21st, 2024, when he noticed that a position had begun building in the $0.50 call contract expiring on June 21st, 2024. On May 19th, 5,632 contracts transacted, and 3,080 carried over into open interest. The transactions occurred largely at the ask.
The following trading day on May 20th, another slew of orders hit the tape, when 15,379 volume transacted, and 10,983 contracts carried over into open interest. The volume on 5/20 was largely at the bid, however; so some pause was had on the sentiment of the position.
One other thing we noted on $BNED was the short interest.
From January 2024 to May 2024, the short shares available dropped significantly from 5,400,000 to only 200,000. Following a heavy meme rally in $GME and $AMC, heavily shorted stocks have come back to popularity, and many meme and momentum traders have had their eyes on these shorted stocks. Indeed, in the case of $BNED, May 21, 2024 saw a massive spike in shorted shares from 6.9 million on 5/20, to 72.1 million on 5/21.
The spike in shorted shares wasn’t the only notable occurrence on 5/21, however.
Throughout the day on May 21st, more and more contracts of the $0.50C 6/21/2024 transacted; mostly at the ask. A total of 37,714 transacted, at an average price of $0.24 per contract. Of those, 7,836 carried over into open interest; but by that point, it was likely too late to enter the trade.
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In after hours trading, $BNED had already run from a close of $0.54 per share, to a high of $1.12. In Pre-market trading, the stock edged a little higher, hitting $1.16 per share. Everything truly came to a head shortly after market open on May 22nd, when $BNED hit a high of $1.35 per share; a 170% gain in the stock from the last session’s close. The response in the contract value certainly reflected the massive stock gains.
The value of the $0.50C 6/21/2024, at $0.85 in the money, exploded. From an average fill of $0.24 the day prior, at the high of day on 5/22, the contract was worth $0.90; a 275% gain overnight. At the time of writing, the $BNED stock price has dipped as low as $0.80 and bounced back to around $1 per share, maintaining this contract’s in-the-money status. User B-Rad shared the results of this trade on X/Twitter, following the stellar play.
Had a trader entered on Monday, 5/20 when the largest volume transacted, they’d have taken $0.12 to $0.90; a 650% increase. The average fills for each day above tell a tale of some happy traders, I’d say!
Nvidia, $NVDA has earnings today.
Let's use Unusual Whales earnings page to learn more: unusualwhales.com/stock/NVDA/earnings
Right now $NVDA's expected move is 7.03%, or $66.73. You can see NVDA options is slightly bearish today, but generally positive headed into earnings over last seven days.
The average move around the last 9 earnings was a +15% jump.
$NVDA's last 5 earnings had two moves within expected moves, three that broke outside (and they broke large, the largest move being a 24% actual move, while the expected move was only 6.10%, insane).
Over last four quarters $NVDA has consistently reported better EPS and financials than expected.
Let's break down how the moves and straddles performed.
Generally before earnings $NVDA had positive moves two week, one week, and days before earnings. After earnings, this generally has remained positive.
If you took a one day long straddle, generally you would have had over +100% returns on average, due to three of the last five earnings outperform their expected move.
However, generally, over the last nine quarters, it was better to take the short one day straddle or strangle, and sell before a week hits. After the first day of earnings move, you found Nvidia, $NVDA, often moving to the upside, more than expected, so taking the short straddle off had been the move.
To see NVDA earnings breakdown check here: unusualwhales.com/stock/NVDA/earnings
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!
Remember, we are having a Memorial day sale. Get 15% off any tier on Unusual Whales, and 20% off when you upgrade a tier!
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.