What the Options Market Expects for Uber

UBER calls account for five of the six most active options so far

May 16, 2019 at 12:49 PM
facebook twitter linkedin

Ride-hailing concern Uber Technologies Inc (NYSE:UBER) began trading on the Big Board on May 10, and today, traders can begin speculating on the Wall Street freshman via options. While we still have plenty of trading hours left before the close, it looks like the options crowd is leaning bullishly toward UBER so far.

After pricing its initial public offering (IPO) at $45 per share last Thursday, Uber stock began trading at $42, only to settle its first session as a publicly traded entity at $41.57. UBER shares subsequently fell to a lifetime low of $36.08 this past Monday, May 13, but today are on pace for a third straight day in the black, and their highest close ever. At last check, UBER is up 4.6% at $43.20.

UBER stock chart may 16

The security has seen roughly 22,000 calls and about 15,000 put options change hands so far today. In fact, five of the top six most active options are calls.

Near the top of the pack is the weekly 5/24 46-strike call. "Vanilla" buyers of the calls expect the stock to topple $46 -- and, thus, its IPO price of $45 -- by the close next Friday, May 24, when the weekly options expire. Meanwhile, the weekly 5/31 47-strike call and the June 41 call are also seeing notable initiations.

The biggest block consisted of 7,500 contracts at the January 2021 25-strike put, which Trade-Alert said was tied to shares. As such, it's likely the buyer picked up the puts as long-term options insurance, paying roughly $2 million for the hedge, which locks in an acceptable price to dump UBER stock ($25 per share), should the trader's position tank before the LEAPS expire.




These investors are using the market's volatility to their advantage and scoring triple-digit gains on many of their trades.

Even in today's sideways bear market, this trading strategy has continued to provide consistency and profitability to a small group of investors. By using this approach, these traders are removing directional risk and still hitting triple-digit returns. If you want access to this strategy, and lower risk with higher returns sounds good to you, then don't wait another minute.

Join us now to receive our next trades the moment they come out!


Common mistakes options traders make


Special Offers from Schaeffer's Trading Partners