While the larger market has churned sideways, bullish investors in Chargepoint (CHPT) - Get ChargePoint Holdings Inc. Reporthave had a fantastic two weeks.
Shares of Chargepoint have risen from $10.31 to $16.15. That''s more than 56 percent in just 13 trading days, and institutional investors have come along for the ride in the form of colossal option purchases seen by Market Rebellion.
What Is Unusual Option Activity?
Unusual Option Activity is a mixture of sophisticated algorithms and big-scale operations, which allows the smart money to stay one step ahead of the market... and which they can exploit through the power of options.
Unless you know what to look for, the trades they make remain hidden beneath the surface of the market, buried beneath a sea of option order flow.
When all three of the above conditions are true at once, it is worthwhile to pay attention. However, when several, repeated trading strategies like these occur continuously in the same underlying stock, thats unusual option activity.
This is exactly what Market Rebellions Heat Seeker algorithm spotted in Chargepoint (CHPT) - Get ChargePoint Holdings Inc. Reportover the past two weeks.
Chargepoint boosts smart money while driving.
Chargepoint has made 12 large option purchases in the past 13 days. Starting with a $1.68 million dollar trade on May 23rd, the stock trading was just $10.67, and repeating each and every time in a single day.
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Each green arrow denotes a bullish option trade, annotated with the total dollar amount to be risked.
This institutional trader (or business) risquared a total of $33.8 million on these 12 bullish option trades, with the most recent being today for $1.28 million.
Are you ready to start trading? Try Unusual Option Activity Essential. Every week, you may follow the "smart money" with a fresh UOA trade strategy, including technical levels so you can know how to manage each trade!
What Caused The Surge in Chargepoint?
It''s unclear why Chargepoint put pressure on the upside so quickly. It might have something to do with gas prices reaching new highs, but perhaps that''s the whole story.
What exactly was the company earnings report? Likely. During the reference Chargepoint reported a revenue beat and an EPS miss. Clearly the EPS miss didn''t keep the stock from soaring, but the report was far from excellent.
Target (TGT) - Get Target Corporation Reporthad a similar earnings result around the same time period, a revenue beat and an EPS miss. Target fell -24.84% in a single day to a new 52 week low.
Target''s EPS loss wasn''t so much different from Chargepoint, but you''d''t believe it from the beginning.
More curiously, it is unclear exactly how these institutional traders dubbed the bottom so perfectly. Chargepoint had lowered more than 60% year over year, but the electric vehicle charging stock has still a lot to cover before returning to its all-time high of $49.48, but the past two weeks are a good start.
What is clear: Through monitoring unusual option activity, traders can get a sense of the Wall Street elite. These institutional traders cant predict the future, but they have access to far greater resources than most individual traders, and have a common interest in being right.
This is what makes unusual option activity such a powerful piece of market information.