Bulls and Bears – Big UOA Earnings Trades in DASH & APO

by

Justin Nugent

October 31, 2023
at 6:26 PM

On 10/31, we issued two pieces of earnings themed UOA. One trade didn’t pan out, but other one made up for it in spades with a 919% rally. Let’s dig into the result:

11/02 UPDATE: HOW THE TRADES PERFORMED

Now that the dust has settled we can evaluate how both trades went!

First, the loser: The $APO put spread expiring Nov. 17th bought for $1.19 is now worth around $0.15 depending on your fill – definitely a miss there. $APO still posted mixed earnings with lower revenue numbers than were expected, but the stock rose, and there’s nothing we can do about that. Luckily, the Doordash rally more than made up for it.

The $DASH $82 strike calls expiring Nov. 3rd bought for $0.81 rallied to a high of $8.26 today – a 919% gain at the high.

In total, if a trader entered both of these positions at the UOA-trade value, they spent exactly $2.00 plus any commissions – and they made a potential net profit of $6.41 – leaving with a potential net total trade value of $8.41.

When trading options through earnings like this, there is always inherent risk of a total miss like we had with $APO. However, when you catch a slam dunk like this UOA in Doordash, it can make up for that miss in a big way.

We hope you managed to get in on this Doordash trade, and that you got to put some cash in your pocket. Congratulations Rebels!

Here’s the original unedited post from 10/31 where we issued both pieces of free UOA:

We’ve seen a lot of accurate UOA predictions lately ahead of earnings. Yesterday, for instance, someone dropped big money on a bullish position in Pinterest. Today, Pinterest is higher by 18% at the time of writing.

The options they purchased (above), bought for an average price of $1.425 expiring November 17th, are now worth a current mid price of $4.80 – and traded over $5.00 earlier today.

This isn’t the only earnings trade we’ve seen lately come in clutch. When we track unusual options activity, we’re hunting for big buyers who are willing to put their money where their mouth is. There’s no shortage of that during earnings season. So today, we’re releasing two pieces of earnings-themed UOA – one bearish, and one bullish.

BULLISH BUYING IN DASH

Covid-high-flyers have not been in vogue this year — and bullish bets haven’t always paid off this particular earnings season. But that didn’t stop PINS from flying higher after a big earnings beat – and this buyer may be making a similar prediction here in Doordash (DASH). These options, expiring this week (November 3rd) are a bet that DASH shares will rise at least above $82.81 dollars per share by the end of the week. That’s a rally of more than 10%. That’s more than the average earnings move for DASH, however with volatility running high, and the market still oversold on a short-term basis, this could end up being a surprising outcome. Here’s the UOA:

TICKER: DASH
EXPIRATION: November 3rd
STRIKE: $82
OPTION: CALLS
PRICE WHEN BOUGHT: $75.05
OPTION PRICE: $0.81
EARNINGS: After hours, November 1st
QUANTITY BOUGHT: 6,250
TOTAL TRADE VALUE: $506,250

Here’s a YTD view of Doordash shares:

Doordash shares reached a 52 week high of $92.61 on July 31st – if shares were to rally to this level by November 3rd, these options would reach a value of $10.61. That’s unlikely – but with the extreme moves we’ve seen lately, anything is possible.

This isn’t the only big earnings bet we saw today.

BEARISH BUYING IN APO

Because the market is locked in a tough battle, we would be remiss not to include a bearish earnings bet as well. Today, we saw a buyer come in for APO bearish put spreads. These spreads cap themselves at a max value of $5.00, and were bought for a total of $1.19. To reach max value, financial stock Apollo Global Management will have to fall to $70.00 by November 17th, the expiration of the options. Here’s the UOA: