Far OTM Puts Bought in CVNA Right Before Stock Gets Cut in Half

After a big earnings miss, CVNA isn't doing so hot. Shares fell more than 37% overnight following a large bearish bet that we identified last week. As a result, shares are trading at $9 in line (to the penny) with the "smart money's" prediction

Justin Nugent

This article was last updated on 11/04/2022.

carvana unusual options activity, carvana, cvna uoa, carvana uoa

Today, we’re talking about Carvana unusual options activity. Remember Carvana

“Caravana to the moon” — Source: Wallstreetbets
Yes, that Carvana. Source: Ycharts

She’s not doing so well.

Last night Carvana reported its second top and bottom line earnings miss in a row. And this one was ugly.

Carvana reported a -35.37% miss on EPS (-$2.67 vs -$1.97 expected) and a -8.34% revenue miss ($3.39B vs $3.69B expected). As a result, shares of Carvana fell -37.28%, to $9.00 in intraday trading.

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As we write this, shares of CVNA continue to plummet. Source: Google

If you read the title, you already know where we’re going with this.

Carvana Unusual Options Activity: $9 Strike Puts

Source: Market Rebellion Unusual Options Activity

You can’t make this stuff up. The week before last, someone dropped over a quarter-million dollars on far OTM $9 strike puts. These puts were set to expire worthless unless Carvana experienced a car-pocalypse. Of course, you’ve seen the graph above. You already know what happened. These puts, which expire November 18th, so the extrinsic value combined with Carvana’s high-speed plummet is leading the value of these bearish puts to rapidly accelerate in value. 

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