I never understood the fascination with Aurora. It was always mind boggling to me. I was always a Canopy, Aphria guy as my 2 big boys. Although I did invest in a lot of mj penny stocks that I have since gotten rid of at losses.
November 6, 2020 10:25 AM ET (BZ Newswire) -- Options On Friday, shares of Aurora Cannabis (NYSE:ACB) saw unusual options activity. After the option alert, the stock price moved up to $9.38.
Sentiment: BULLISH
Option Type: TRADE
Trade Type: CALL
Expiration Date: 2021-03-19
Strike Price: $15.00
Volume: 1581
Open Interest: 1504
Three Indications Of Unusual Options Activity One way options market activity can be considered unusual is when volume is exceptionally higher than its historical average. The volume of options activity refers to the number of contracts traded over a given time period. The number of contracts that have been traded, but not yet closed by either counterparty, is called open interest. A contract cannot be considered closed until there exists both a buyer and seller for it. Another indicator of unusual options activity is the trading of a contract with an expiration date in the distant future. Additional time until a contract expires generally increases the potential for it to grow its time value and reach its strike price. It is important to consider time value because it represents the difference between the strike price and the value of the underlying asset. Contracts that are “out of the money” are also indicative of unusual options activity. “Out of the money” contracts occur when the underlying price is under the strike price on a call option, or above the strike price on a put option. These trades are made with the expectation that the value of the underlying asset is going to change dramatically in the future, and buyers and sellers will benefit from a greater profit margin.
Understanding Sentiment Options are “bullish” when a call is purchased at/near ask price or a put is sold at/near bid price. Options are “bearish” when a call is sold at/near bid price or a put is bought at/near ask price. These observations are made without knowing the investor’s true intent by purchasing these options contracts. The activity is suggestive of these strategies, but an observer cannot be sure if a bettor is playing the contract outright or if the options bettor is hedging a large underlying position in common stock. For the latter case, bullish options activity may be less meaningful than the exposure a large investor has on their short position in common stock.
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