Options Traders React to Three Struggling Stocks

LK, DIS, and NVDA are all lower amid the coronavirus outbreak

by Patrick Martin

Published on Jan 27, 2020 at 12:06 PM
Updated on Jun 24, 2020 at 10:16 AM

The 20 stocks listed in the table below have attracted the highest weekly options volume during the past 10 trading days, with data courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. The stocks highlighted in yellow are new to the list. Below, we're going to take a closer look at Luckin Coffee Inc (NASDAQ:LK) and Walt Disney Co's (NYSE:DIS), as well as chip name Nvidia Corporation (NASDAQ:NVDA)

MAO Jan 27

LK has seen 199,056 weekly call options traded during the past 10 days, compared to 116,661 puts. Most active today though has been the weekly 1/31 30-strike put, where sell-to-open activity is detected. This indicates that some options traders are calling the $30 level as a floor this week. Luckin Coffee stock was last seen trading down 5.1% at $38.75, running up a now 23% deficit in the last seven days amid the growing coronavirus panic among Chinese stocks

Moving on to Disney stock, the security has seen 218,548 weekly call options and just 127,102 put options trading within the past two weeks, but the weekly 1/31 136-strike put is seeing the most action so far today among weeklies. At last check, DIS was trading at $136.76 -- down 2.4% for the day -- heading for its third straight loss of 1% or more after closing its Shanghai Park last week amid the coronavirus outbreak. The shares' 200-day trendline, which supported an October pullback, was breached this morning for the first time since late March.

Then there's chip stock Nvidia, with 223,143 weekly calls changing hands in the last 10 days, compared to 134,730 puts. The weekly 1/31 250- and 240-strike calls are leading the charge today, with new positions being opened at both. This shows that some call buyers remain undeterred despite the global headwinds today. NVDA is 4.2% lower to trade at $240.01, weighed down by the growing coronavirus concerns. However, the shares' 40-day moving average has cushioned today's pullback, after the stock notched a new record high of $259.50 on Friday.


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