Whales are big, important people who trade a lot of stocks. They just did something interesting with AMGN, which is a company that makes medicine. Some people think they know why the whales are doing this. The article looks at what these whales did and tries to figure out if it means something good or bad for AMGN's price. Read from source...
- The title is misleading and clickbait. It suggests that there are some insiders or whales who are doing something special with AMGN, but does not provide any evidence or details of their actions or intentions.
- The article uses vague terms like "uncommon options trades" and "special options" without explaining what they mean or how they are measured. It also does not specify the time frame or source of these data, making it hard to verify its credibility.
- The article implies that big-money traders have some inside information or knowledge about AMGN's future performance or events, but does not provide any reasoning or analysis to support this claim. It also ignores other possible factors that could influence the options trading activity, such as hedging, arbitrage, or risk management strategies.
- The article presents a predicted price range for AMGN based on volume and open interest, but does not explain how these metrics are related to the underlying fundamentals or valuation of the company. It also uses a wide and arbitrary range ($140.0 to $320.0) that does not reflect any clear technical or fundamental trends or patterns in the stock price.
I would classify the overall sentiment of this article as bearish, with a slight leaning towards bullish. The reason for this classification is that there are more put options than call options, which typically indicate a bearish outlook on the stock price. However, there are also some bullish signals in the form of calls and the predicted price range, which suggests that some investors believe the stock could rise in value. Additionally, the article mentions that "this isn't normal" regarding the uncommon options trades, implying that something unusual or unexpected might happen with AMGN. This uncertainty could also contribute to a bearish sentiment, as investors may be hesitant to make significant bets on either direction without more information.
Possible actions based on the information given are:
- Buy AMGN calls at a strike price of $160 or lower with an expiration date of June 2023 or later. This would benefit from a bullish scenario where AMGN's stock price rises above the strike price before the options expire, allowing the investor to sell them for a profit.
- Sell AMGN puts at a strike price of $140 or higher with an expiration date of June 2023 or later. This would benefit from a bearish scenario where AMGN's stock price falls below the strike price before the options expire, allowing the investor to buy them back for a profit.
- Implement a covered call strategy by owning AMGN shares and selling AMGN calls at a strike price of $160 or lower with an expiration date of June 2023 or later. This would generate additional income from the options while still retaining the upside potential of the stock price.
- Implement a protective put strategy by owning AMGN shares and buying AMGN puts at a strike price of $140 or higher with an expiration date of June 2023 or later. This would limit the downside risk of the stock price while still retaining the upside potential.
- Implement a collar strategy by owning AMGN shares and selling AMGN calls at a strike price of $160 or lower with an expiration date of June 2023 or later, and buying AMGN puts at a strike price of $140 or higher with an expiration date of June 2023 or later. This would balance the risk and reward between the stock price and the options price by setting a range of prices where both the calls and the puts have value.