With the stock market so quiet today, one of the most unusual options trades crossed the tape. Carrying a market cap of only $3.7 billion, Extended Stay America STAY – NYSE trades 314 total options per day on average. However, earlier in today’s session someone bought 12,000 STAY September 20 calls.
Entering the day, the total open interest for STAY amounted to 766 contracts. In other words, if you added together every call and put option on every strike in every month, it would sum to 766. So this single order represents more than 15 times the entire open interest.
In addition to the relative size standing out like a sore thumb, at $0.50 per contract this customer put $600,000 on the line. Given a break-even price of $20.50, STAY has to increase 4.3% for this trade to pay off.
We doubt STAY was on many watch lists prior to today, but now it’s on ours. Take note and add it to yours too.
Top 5 Imminent Mergers & Acquisitions: By tracking highly unusual options trades, we tip members to upcoming buyouts, M&A activity, and secret boardroom deals before the news is public. Some members have described it as “having a wiretap on every single company.” Click here for the top 5 stocks about to make some major headlines.