CoreWeave Sees Bearish Option Trades as Insiders Reportedly Sold $1B Shares: Options Chatter

Luzi Ann Santos joined discussion · Oct 11 00:09

$CoreWeave (CRWV.US)$ saw millions of dollars in bearish block option trades after Bloomberg reported that the artificial intelligence computing company’s leaders sold more than $1 billion in shares following the expiration of the lockup on the stock in mid-August.

Investor sentiment is leaning negative after the stock jumped more than three-fold to $141.32, from its initial price offering (IPO) in March. The rally is taking a breather following an artificial intelligence frenzy that resulted in a data center shortage, boosting the appeal of CoreWeave’s AI infrastructure.

CoreWeave Sees Bearish Option Trades as Insiders Reportedly Sold $1B Shares: Options Chatter

At 9:42:35 a.m. in New York, an active seller got an $8.69 million premium for selling zero-day-to-expiration call options that give their holders the right to buy 687,000 CoreWeave shares at $139 each by the end of the trading day. That block trade, the biggest on CoreWeave options so far, was posted just as the price of that contract climbed 158% to $13.65.

That exit from an expiring contract was the biggest block trade posted so far. The price of that call option is now down 3%, with just hours left before it expires.

(To see CoreWeave's options chain, click here. For the unusual options activities, click here.)

While the exit was posted at the same time when the purchase of call options with the same strike price expiring in August was recorded, that $5.87 million purchase covered just 1,000 contracts. Each contract covers 100 shares. The stock last traded at $143.15.

Three other multi-leg transactions were posted at that exact time, including the $1.9 million purchase of put options that give their holder the right to sell 687,000 CoreWeave shares at $138 by the end of next week. That could shield a shareholder should the stock price decline below that strike price.

CoreWeave Director Jack Cogen sold shares worth $477 million in the quarter, while co-founder Brannin McBee netted $426 million, Bloomberg reported, citing data from the Washington Service, which tracks such buying and selling.

The company’s biggest institutional owner Magnetar Financial LLC also sold almost $1.9 billion worth of shares over the same time period, according to the report. The hedge fund still holds about 23% of the company’s stock, according to a filing with the Securities and Exchange Commission on Oct. 7.

Debate over whether the AI trade is now in a bubble has given investors a pause, while short sellers are piling in. Famed short-seller Jim Chanos questioned CoreWeave’s business model, noting that the company has a zero return on invested capital.

Source: x.com

Share your thoughts on CoreWeave in the comments section. Do you think there's a strong argument to turn bearish on the stock, or will the skeptics be proven wrong? Let your voice be heard by voting below. And if you want to read more options columns like this one on Meta, or this one on Amazon, or this one on AMD, follow me here.

Disclaimer: Options trading entails significant risk and is not appropriate for all customers. It is important that investors read the Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Opening new options positions close to or on their expiration date comes with substantial risk of losses for reasons that include potential volatility of the underlying security and limited time to expiration. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period. Certain complex option strategies carry additional risk, including potential losses that may exceed the original investment amount. If applicable, supporting documentation for any claims will be furnished upon request.