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Institutional call buying targets oversold pre-revenue stocks
Options trader Andrew Keene says large call purchases in X-Energy, Oklo, and IonQ are concentrated in specific strike and expiry windows as the names have slid far from prior highs.
Broad market weakness and a sharp rotation out of certain high-growth areas are weighing on pre-revenue and speculative stocks, according to MarketBeat Ratings. The sell-off has been broad enough that even companies with long-term narratives have been pulled lower, MarketBeat Ratings said. In that environment, options trader Andrew Keene, founder of AlphaShark.com and a 25-year veteran of the Chicago Board Options Exchange trading floor, is tracking oversized institutional call buying. Keene said his process focuses on the size, timing, and conviction of large call purchases across specific expirations, along with technical signals such as relative strength and average daily trading range. Three names have drawn Keene's attention this week, all of them down sharply from earlier highs and showing unusually large institutional call activity. X-Energy, which was pre-revenue and priced its IPO in April before jumping to as high as $37, has since lost nearly two-thirds of its value, falling after trading reached a 52-week low near $13.20, MarketBeat Ratings said. Keene highlighted an institutional purchase of October 35-strike calls placed weeks before the decline, with Keene later adding as the option price moved down toward about $25 per contract.
MarketBeat Ratings also said Keene has positions extending to October, December, and January to give trades months to play out rather than relying on short-term moves.