UOA: Big Bet On Pinterest Q3 Earnings Before the Beat

UOA: Big Bet On Pinterest Q3 Earnings Before the Beat

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Now that the Pinterest unusual options activity earnings trade has had a bit of time to pan out, let’s look at how it performed.

11/02 UPDATE: HOW THE PINS UOA TRADE PERFORMED

The Pinterest November 17th expiring $25 strike calls bought out of the money one day before earnings for an average price of $1.425 traded as high as $6.22 today as Pinterest rallied to a new 52 week high.

Here’s the original unedited post:


Today, just before Pinterest Q3 earnings released, we saw a massive option trade roll in.

  • TICKER: PINS
  • OPTION: CALLS
  • TIME OF SALE: 10/30, 10:29AM EST
  • QUANTITY: 5,000
  • STRIKE: $25 ($0.40 cents out of the money)
  • OPTION PRICE AT THE TIME: $1.425 
  • TOTAL TRADE VALUE: $712,500
  • STOCK PRICE AT THE TIME OF SALE: $24.60
  • EARNINGS: 10/30, AFTER HOURS

Once the earnings released, we got the news: Pinterest posted an 11% increase in revenue in the third quarter, and topped analyst estimates on the top and bottom line:

Revenue: $763.2M vs $743.5M Expected

EPS: $0.28 adj. vs $0.20 Expected

That sent shares of PINS rallying +13.19% after hours — and more than +15% from the initial trade price.

  • CURRENT STOCK PRICE: $28.41 (+15.49% from the trade price)
  • ESTIMATED OPTION PRICE IF STOCK PRICE OPENS HERE: ~$3.50 (+145.6%)
  • ESTIMATED TOTAL TRADE VALUE IF STOCK PRICE OPENS HERE: $1,750,000 (Approximate gain of over $1 million dollars)

_

Last week, bullish trades into earnings like these haven’t been paying off. But this buyer still took the shot, and if the stock remains where it is tomorrow morning, this buyer will have a chance to take a serious, seven-figure payout.

This is the power of unusual options activity – these institutional traders have access to data, research, and information that individual traders can’t see. The only way to get inside the minds (and wallets) of the Wall Street elite is by monitoring and trading unusual options activity.

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