While eager shoppers queued up to take advantage of big discounts on consumer electronics and other holiday gift items, a handful of options traders loaded their shopping carts with commodity and crypto options. The day after Thanksgiving, Black Friday, is the busiest shopping day of the year in the United States. It is also an abbreviated trading day on an already holiday-shortened week. Consequently, trading volumes are typically well below average, and that held true on Friday. The total option volume of 20.7 million contracts was less than half the 43.6 million traded the prior Friday, November 17th. The 2.7 million individual trades were far lower than the 5.2 million trades from the Friday a week prior. Rather than contemplate whether that leftover turkey is still safe to eat three days later, perhaps it’s worth looking into what the few traders who showed up on Friday were up to. While volumes were well below average overall, a few names saw well above-average volume, and a couple of key themes stood out. Crypto buying Coinbase Global Inc. (COIN) , Marathon Digital Holdings (MARA) , Microstrategy Inc. (MSTR) , and Riot Platforms (RIOT) all saw well above average volume on Friday and in each case call volume significantly outpaced put volume. The largest single print in Coinbase options was a purchase of 2,314 December $120 calls. Ultimately 6,714 of them traded, and total volume across all call contracts was 180,000, outpacing put volumes by 3-to-2. COIN has rallied over 60% since the late October lows, and while sentiment remains bullish overall, it does appear a bit extended when looking at trading range/envelope indicators such as Bollinger Bands, relative strength indicator and the like. It’s possible that an institutional trader is willing to bet the rally could continue, but only with a defined risk. Another trade that definitely stood out for its rather ambitious price target was a purchase of 252 December $700 strike calls. As the chart below illustrates, MSTR would need to move very sharply higher to levels unseen since 2021 for these calls to be profitable. Is this possible? Yes, I suppose anything is. Is it probable? No. In fact, the options market itself is saying there is only a 10% chance these calls expire in the money. As an alternative consider the following options strategy, called a “call spread risk reversal”. A strategy that finances the purchase of an upside call spread by selling a downside put. (Note the expiration used…
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