Calling Some Unusual Action on $DBX and $TWTR

unusual options trades and unusual options volume

Dropbox is now some 40% higher than its December lows.  The stock is not alone in its price recovery as many names have seen a strong return since the Christmas eve lows.    Is there more upside coming?  Or was this just a relief rally?

A great read on Dropbox ($DBX) if you have the time sums it up better than I can.

I think the stock is ready to break back over $30 a share.   Strong resistance lies ahead at $27, a break of which sets up that $30 figure and beyond.

However what has really piqued my interest is the continued buying of January 2020  $60 calls.

and this past Friday the action continued.

Option sentiment was terribly bullish on Friday, as was the overall price action.  A wall at $25.15 fell on heavy buying volume, sending the stock to a near high of the day close.

A positive earnings report on 2/21/19 could move the stock back over $30.00 a share.  Which is still some 50% less than the price those $500k+ worth of calls are  betting on for the start of 2020.    I piggybacked a on those $60.00 calls, but instead of going far out of the money, I cut the time and price down.

These calls are almost a double after Fridays action.  They will also capture the upcoming earnings report.  At that time I may look to move up the ladder for some summer calls.


I do recall when $TWTR was trading in the lows teens in 2017 some very unusual call action betting on   a possible 100%+ move:

I commented then in the chat room -->>

and I think that is where we are with $DBX.   Some very unusual call action that is over 100% out of the money, with a lot of time until expiration.  Just like the Twitter trade, we very well may be looking back months from now in awe of just how prescient those $60 leaps were....

which brings me back to twitter.  On Friday the Jan $70 calls saw heavy action with a giant block bought on the ask --->>

again with almost a year of time on them and over 100% out of the money.  We need to see if Fridays action was new or perhaps closing (stay tuned on Monday morning for the details)   The original large $70 2020 opening call trade took place toward the end of last year.

The Twitter trade could be setting up again for some upside into the summer.  Deja Vu all over again?

I'll be watching closely.

$DBX  at $60 sounds about as crazy as a NY Mets World Series this year.   Twitter at $70?  Equally as odd however stranger things have happened.  And in both cases the size of the trades give both some credence.

Have a great weekend see you on Monday!

Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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