Today we discuss some of the best penny stocks to watch with unusual activity in the options market. Traders like you often look for ways to find companies to invest in or trade. Using stock market data can be a great asset. Earlier this week, we discussed things like penny stocks with insider buying. We’ve also discussed stocks with bullish ratings from analysts, and, like today’s article, we’ve talked about penny stocks with unusual options activity.
There’s no shortage of speculative sentient right now ahead of the August Jackson Hole meeting. The entire market is waiting patiently to see what the Federal Reserve says next and how it plans on addressing inflation. The critical thing to remember is that timing for different catalysts is essential to understand. Small-cap and micro-cap stocks are incredibly volatile. Prices can shift at a moment’s notice, and just as catalysts can send share prices higher, they can also pull the rug out from under you.
Why Is Options Volume Important In Penny Stocks?
Like many data points, options flow is looked at for sentiment-based trades. As a caveat, high call volume or put volume doesn’t necessarily mean the bet is bullish or bearish. We expand on this in the article Trading Options 101: A Beginner’s Guide, we explain some of the functions of options and how volume factors into the mix. Generally speaking, traders will use Call volume, Put volume, and open interest to determine where sentiment lies. The following companies have experienced this phenomenon in the stock market today and could be worth a closer look.
4 Penny Stocks To Watch
- FuboTV Inc. (NYSE: FUBO)
- Canoo Inc. (NASDAQ: GOEV)
- Uranium Energy Corp. (NYSEAMERICAN: UEC)
- Workhorse Group Inc. (NASDAQ: WKHS)
FuboTV Inc. (NYSE: FUBO)
Streaming services companies have been a mixed bag this year. The breakdown of stocks like Netflix and Roku shined a bright light on some of the risks involved with companies like these. That also echoed in the market regarding smaller-cap stocks like FuboTV earlier this quarter.
Jump ahead to this month, and things are much different for the sports entertainment & betting company. Since the start of August, FUBO stock has been steadily climbing higher, which was also helped by a strong showing at its recent investor day event. This week, the penny stock moved to highs of over $8 before settling back down in the mid-$4 range. Fubo inked a notable deal earlier in the month with Ryan Reynolds-founded Maximum Effort Productions. The agreement includes an exclusive first look at the unscripted TV series, Maximum Effort, which will launch on the network.
Reynolds commented on the new deal in an August update. “FuboTV has taken a fresh approach to developing and delivering content in the digital age, and the entire team is passionate about thinking differently and taking chances. I genuinely can’t believe Maximum Effort gets to program our own network. I am beyond excited and grateful to Fubo.”
FUBO Stock Options Activity
Against this backdrop and some bullishness in the overall stock market today, FUBO stock has gained interest from options traders. Specifically, this week’s (August 26th) $4.50 and $5 strike calls. It will be interesting to see if these seemingly bullish bets in the FUBO stock options chain play out by expiration.
Canoo Inc. (NASDAQ: GOEV)
EV penny stocks have heated up recently. Canoo Inc. is no stranger to this trend. Earlier this quarter, Canoo gained plenty of attention thanks to a contract to supply its electric vehicle to the U.S. Army for analysis and demonstration. NASA also selected the company’s platform as a crew transport vehicle for delivering astronauts to the Artemis launch site for lunar missions.
Canoo most recently completed deliveries to finalize its vehicle customization with Walmart. The two have worked together to configure Lifestyle Delivery Vehicles for the grocery chain and are deployed for deliveries in a pilot program in Dallas.
This week Tony Aquila, Canoo’s CEO, said that “LDV has been engineered to enable a wide range of package deliveries, including refrigerated items, groceries and general merchandise – and do it efficiently, emission free and with a high level of driver comfort and ergonomics. And we have been turning a lot of heads in the neighborhoods when driving by in our uniquely identifiable vehicles.”
Not only has unusual options action helped bring attention to GOEV stock, but insider trading was also a factor in August. The company’s CEO snagged 200,000 shares of the EV company’s stock at an average price of $3.98.
GOEV Stock Options Activity
In the article 5 Best Penny Stocks To Buy On Reddit According To Options Traders, GOEV stock was highlighted thanks to action in the September 2nd $5 Call contracts. Jumping ahead to today and there’s a significant amount of Open Interest in the September 16th $5 contracts. There’s also above-average volume in this Friday’s (August 26th) $4 strike calls.
Uranium Energy Corp. (NYSEAMERICAN: UEC)
Uranium energy stocks are getting a recharge this week thanks to trends in the energy market. Reports that Japan plans to shift back to nuclear power have prompted a bullish move across the sector. Uranium Energy Corp. is among the popular penny stocks today that have gained investors’ attention.
In addition to the overall bullish market sentiment for uranium stocks, UEC has gained interest thanks to news earlier this week. The company completed the acquisition of UEX Corporation to bring its portfolio of energy projects under the UEC umbrella. CEO Amir Adnani even went as far as saying, “There is an emerging trend by Western utilities to secure supplies from uranium projects in politically stable and proven jurisdictions, this is a strong fit with UEC’s permitted, and production-ready U.S. ISR projects and extensive growth pipeline in Canada.”
Against this backdrop, traders have pushed aside recent uncertainty around uranium energy’s future thanks to news out of Japan.
UEC Stock Options Activity
That same sentiment echoed in the options chains today. For UEC, the September 16th $4.50 strike Calls have gotten most of the action so far. That’s compared to the Open Interest going into the Wednesday session.
Workhorse Group Inc. (NASDAQ: WKHS)
Another one of the EV penny stocks to watch this week is Workhorse Group. Thanks to renewed attention on the US Postal Service planning on “significantly” boosting its EV delivery purchases, companies including Workhorse and Oshkosh were on the radar of investors. The USPS proposed a plan to buy at least 50% of an initial 50,000 vehicle order.
The company was a previous contender for the USPS big, which was ultimately won by Oshkosh Corp (NYSE: OSK) in 2021. While this speculation is yet to play out, mixed earnings put some pressure on the penny stock. That has also highlighted the mounting short interest in WKHS stock this month. As of this article, the short float percentage for Workhorse is around 26%-27%, according to data compiled from Fintel.IO and TDAmeritrade. Thanks to attention on short squeeze stocks, many with short floats above 20% are gaining attention from retail traders in the stock market this week.
WKHS Stock Options Activity
If the short data wasn’t enough, unusual options activity in the September 16th $4.50 calls have also raised the bar. At the time of this article, more than 1,200 contracts were traded.