So, some big people are betting a lot of money on a company called Snowflake. They think it will change in price from $115 to $190 in the next few months. The stock is currently at $145 and might be cheap soon. Two experts say it could go up to $185. Some people are buying options, which are like bets on how much a company's value will change, but riskier than regular bets. Read from source...
- The article title is misleading and sensationalized, implying that there is something unusual or suspicious about the options activity for Snowflake on April 22. However, the article does not provide any evidence or explanation of why this option activity is unusual or what it means for the company's future performance.
- The article relies heavily on vague terms like "big money traders", "somebody knows something", and "special options" without defining who these actors are, how they are measured, or what criteria they use to classify them as such. This creates a sense of mystery and uncertainty that may appeal to readers' curiosity but does not contribute to their understanding of the market dynamics or the company's fundamentals.
- The article uses percentages to quantify the sentiment of the big-money traders, but these numbers are based on arbitrary categories (18% bullish and 81%, bearish) that do not reflect any consistent or standardized method of option pricing or valuation. Moreover, the article does not explain how these percentages are derived or what they mean for the option holders or the underlying stock price.
- The article mentions projected price targets based on volume and open interest, but these metrics are also presented without any context or explanation of how they are calculated or interpreted. The article also does not indicate whether these projections are based on historical data, expert opinions, or other sources of information that may be relevant for the readers.
- The article includes some basic information about Snowflake's products and current position in the market, but this is overshadowed by the focus on the options activity and the price targets. The article does not provide any analysis or evaluation of how these factors affect the company's competitive advantage, customer demand, or revenue growth potential.
- The article cites two professional analyst ratings for Snowflake, but these are presented as if they were independent and objective, when in fact they may be influenced by the same options activity and price targets that the article is trying to explain. Moreover, the article does not disclose any conflicts of interest or potential biases that may exist between the analysts and the option traders, or between the option traders themselves.
- The article ends with a promotion for Benzinga Pro, which may be seen as an attempt to monetize the reader's attention and interest in the topic, rather than providing them with valuable insights or advice on how to trade options successfully.
1. Based on the article, I suggest you consider buying SNOW calls with a strike price below $145 and an expiration date in June or later. This would give you exposure to potential upside in the stock price and allow you to benefit from any positive earnings surprise or market optimism.
2. Alternatively, you could sell SNOW puts with a strike price above $145 and an expiration date in June or later. This would generate income for you and limit your downside risk if the stock price stays flat or declines slightly. However, this strategy also exposes you to the risk of being assigned shares if the underlying stock price drops sharply, so be prepared to cover your short position or buy the stock at a lower price if needed.
3. Another option is to trade SNOW straddles or strangles, which are combinations of calls and puts with the same strike price and expiration date. These strategies involve buying both a call and a put or selling both a call and a put, respectively. This would allow you to profit from significant moves in either direction of the stock price, but also require you to pay a higher premium for the options. Straddles and strangles are more suitable for experienced option traders who can manage their risk-reward ratios effectively.