One of the most interesting “smart money” trades we came across yesterday was with Comcast Corporation. (NASDAQ: CMCSA).
If you’re new here, a “smart money” trade is a relatively large volume option trade most likely made by a pro trader. The idea is to analyze unusual options activity, identify an interesting “smart money” trade, and then make our best guess as to:
- Which direction the trader thinks the stock is headed
- How much they think it will rise (or fall), and
- In what time frame this will all happen.
If we like what we see after putting all these pieces together, we can mimic the “smart money” trade (on a smaller scale), and potentially ride alongside our pro trader to profits. With all this in mind…
A Pro Trader Just Bet $1,168,796 that CMCSA will Rise in the Next One Week
On Wednesday, September 08, 2021, a pro trader seems to have bought 12,434 of the September 17, 2021, $60 call options on CMCSA for $0.94 per share. Her outlay was $1,168,796.
CMCSA – Options Trade
The trade’s breakeven point is at $60.94, meaning that CMCSA needed to rise to $60.94 for the call option trade to break even. This is around a 1.3% upside from the current price of $60.14. And then for every $1 the stock rises above $60.94, our “smart money” trader will make $1,243,400!
On analyzing the chart of CMCSA, the stock seems to have broken out of an ascending triangle pattern (marked as blue color lines), which would now act as a strong support area. All this makes it likely our pro trader is bullish on Comcast Corporation.
CMCSA- Daily Chart
This lends credence to our conclusion that the pro bought these call options, as opposed to selling them.
If you agree and would like to mimic this trade, here’s how:
Buy to open the September 17, 2021, $60 call options on CMCSA for $0.94 or better.
As always, depending on your risk appetite, do remember to set a stop-loss for the options trade to avoid significant losses.
Happy Trading!
— Trades of The Day Research Team
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