Options traders jump in at new lows

  • BMBL put options volume jumped Friday and Monday
  • Stock fell to new all-time lows last week
  • One OTM put has high OI in two expirations

Dating app Bumble (BMBL) kicked off this week with hard-to-miss put volume. Early Monday morning nearly 87 puts had traded for every call:

Chart 1: LiveAction scan: Highest put-call ratios, 9/25/23. Unusual options activity. Traders focusing on puts.

Source: Power E*TRADE. (For illustrative purposes. Not a recommendation.)

By noon ET, with the stock up more than 1% on the day at $14.80, 15,300 of the November $12.50 puts had traded. That would have been noteworthy in and of itself, but in this case it followed similar activity from Friday, when 14,900 of the $12.50 puts changed hands. Friday’s options chain shows the contract’s open interest (OI) was 16,800:

Chart 2: Bumble (BMBL) November put options, 9/22/23. Bumble (BMBL) option chain. High volume in OTM put.

Source: Power E*TRADE. (For illustrative purposes. Not a recommendation.)

On Monday OI, in the November $12.50 puts had increased to 31,500, which means Friday’s volume mostly consisted of new positions, not liquidations of existing ones.

Today’s OI total will show whether traders were getting in or out of the market on Monday. For example, if most of yesterday’s trades consisted of new positions and OI jumps to, say, 46,500 contracts, that would represent 4,650,000 shares of BMBL stock worth more than $58 million. (Some perspective: BMBL also has OI of 35,000 in its October $12.50 puts, and OI of 10,700 in the October $15 puts. The highest OI in any single call option is only 1,700.)

The options activity couldn’t be occurring at a more interesting time, given BMBL fell to a new all-time low last Thursday:

Chart 3: Bumble (BMBL), 4/27/23–9/25/23. Bumble (BMBL) price chart. New lows.

Source: Power E*TRADE. (For illustrative purposes. Not a recommendation.)

Whether the buyers or sellers of these puts will turn out to be correct remains to be seen. As this example shows, positions can change significantly from one day to the next. As of Monday, though, options traders had established some fairly large footprints in BMBL.

Market Mover Update: Bond yields jumped to fresh highs on Monday, following through on last week’s surge. The 10-year T-note yield closed above 4.5%. Bunge (BG) is now testing the lower boundary of its consolidation after testing the upper boundary on September 14 (see “The power of patience”).

Today’s numbers include (all times ET): Case-Shiller Home Price Index (9 a.m.), FHFA House Price Index (9 a.m.), Consumer Confidence (10 a.m.), New Home Sales (10 a.m.).

Today’s earnings include: Cintas (CTAS), TD Synnex (SNX), United Natural Foods (UNFI), Costco (COST).


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