Trade of the Day

December 23, 2016
By

Christmas is a time to relax, reminisce about the year that was, and enjoy time with our families.

For sharp option traders though, it’s another potential opportunity to make lots of money.

It’s also big business for retailers, and there might not be a sub-sector more reliant on holiday sales than toy companies.

December can make or break the year for Mattel MAT – NASDAQ, and someone is counting on MAT to have a very strong holiday season.

[Yesterday], a trader bought 12,000 MAT February 30 calls for $0.70 each.

Bottarelli Research Translation: The time horizon is notable because going out to February allows the trader to capture Q4 earnings. Also the relative size is enormous as MAT trades 1,614 calls per day on average. With a capital outlay of $840,000 and a break-even price at expiration of $30.70, MAT has to increase 8.5% for this trade to pay off. While the broad market has been on a rampage since the election, MAT has been a serious under-performer as it’s down 5.5% since November 8. However, if holiday sales exceed expectations, our customer is poised to make $1.2 million for every $1 MAT rises above $30.70.

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Source: Bottarelli Research



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