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Warner Bros Attracts Huge Options Trades Monday

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Kevin Travers wrote a column · Sep 9 13:51
Warner Bros Attracts Huge Options Trades Monday
Warner Bros Discovery options contracts flew Monday, landing the equity in the number ten spot for high stock options volume. 273k contracts traded hands Monday, but the underlying stock only moved about 1.94% after news that 'Beetlejuice Beetlejuice' brought in $100M in the new film's weekend box office.
In a close examination of the options chain and using moomoo's Unusual Activity options contract features, the story became more interesting. According to CBOE data displayed by moomoo, the volume on Monday came entirely from two contracts: 18-day-to-expiration Calls and Puts straddling the current trading price of $Warner Bros Discovery (WBD.US)$. The Call contract in the top left box of the image below gives the holder the right to buy WBD at 7.5, for a current price of about 30C/share for 100 shares. The Put gives a holder the right to sell WBD at 6.5 for a current price of 7C/share for 100 shares.
Warner Bros Attracts Huge Options Trades Monday
Looking at moomoo's Unusual Options scanner, it becomes clear these two trades were a part of the same strategy, marked as "Multi-Leg". The volume was two large lump transactions: about 124K call and 124k put contracts, representing 12.4M shares each that moved at 10:58:47 ET. The premium associated with the Call options alone was $3.11M, and the market was on moomoo as a sell, meaning the holder was selling calls. Moomoo mobile marks this Call transaction as a Bearish trade regarding the stock's price action.
Warner Bros Attracts Huge Options Trades Monday
Looking at a breakdown of the Call contract, it is clear there were two large spikes in trade volume on Monday and about a month ago. The first high volume day was two days after Warner Bros announced lower earnings than the street expected, sending $Warner Bros Discovery (WBD.US)$ falling 10%. The firm next declares earnings Nov. 7th, far beyond the September 27th expiry date of the contract.
Warner Bros Attracts Huge Options Trades Monday
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