This article talks about how some rich people or big companies bought options to bet that a company called Upstart Hldgs will lose money. They think this because of the way they used their options scanner tool. But there are also some who believe the company will do well, so it's not all bad news for them. Read from source...
- The title is misleading and clickbait. A "deep dive" implies a thorough and detailed analysis of the market sentiment for Upstart Hldgs options trading, but the article only provides superficial observations based on publicly available data.
- The author uses vague terms like "investors with a lot of money to spend" and "something is about to happen". These expressions are not supported by any evidence or explanation, and they imply speculation and conjecture rather than factual reporting.
- The article relies on options scanner data that may not be accurate or representative of the entire market. Options history can be manipulated or distorted by various factors, such as high-frequency trading, insider information, or market manipulation. Therefore, using this data as a basis for inferring market sentiment is questionable and unreliable.
- The article fails to provide any context or background information on Upstart Hldgs, its business model, its financial performance, its competitors, or its risks. Without this knowledge, the reader cannot understand why options trading for this company matters or what implications it has for the future of the firm and its shareholders.
- The article does not present any data or analysis on the actual option contracts themselves, such as strike price, expiration date, volume, open interest, premium, or greeks. These are the essential parameters that determine the value and probability of an options trade, and they should be carefully examined to infer market sentiment and potential trends.
- The article does not offer any balance or contrasting views on the option trades, such as possible bullish or neutral scenarios, alternative explanations for the data, or counterarguments from other analysts or experts. This makes the article biased and one-sided, and it prevents the reader from forming their own opinion based on a comprehensive understanding of the topic.
I have analyzed the article and the market sentiment data for Upstart Hldgs (UPST). Based on my findings, I suggest the following strategies and risks for potential investors.
Strategies:
- If you are bullish on UPST and expect it to rise in the short term, you can buy call options with a strike price near the current market price and an expiration date close to the end of February or March. For example, you can buy the UPST Feb 25 calls or Mar 18 calls at a reasonable premium. This will give you the right to purchase UPST shares at a fixed price in the future and profit from any upside movement. The risk is limited to the premium paid for the options, while the potential reward is unlimited.
- If you are bearish on UPST and expect it to decline in the short term, you can sell call options with a strike price above the current market price and an expiration date close to the end of February or March. For example, you can sell the UPST Feb 25 calls or Mar 18 calls at a higher premium than the ones mentioned above. This will give you the income from selling the options and limit your exposure to any downside movement. The risk is limited to the difference between the strike price and the market price of UPST, while the potential reward is capped by the premium received for the options.
- If you are neutral on UPST and want to hedge your position or generate income, you can buy put options with a strike price below the current market price and an expiration date close to the end of February or March. For example, you can buy the UPST Feb 25 puts or Mar 18 puts at a reasonable premium. This will give you the right to sell UPST shares at a fixed price in the future and profit from any downside movement or protect your portfolio from a sharp decline. The risk is limited to the premium paid for the options, while the potential reward is unlimited.
- If you are very bearish on UPST and want to leverage your short position or increase your income, you can sell put options with a strike price below the current market price and an expiration date close to the end of February or March. For example, you can sell the UPST Feb 25 puts or Mar 18 puts at a higher premium than the ones mentioned above. This will give you the income from selling the options and increase your exposure to any upside movement. The risk is limited to the difference between the strike price and the market price of UPST, while the potential reward is unlimited but capped by the premium received for the options.
Risks:
- The options prices are influenced by various factors such as supply