In this article, we’re focusing almost 100% on data regarding certain penny stocks. We look at the options market to get some idea of potential pent-up sentiment. While high Call volume or high Put volume doesn’t necessarily mean a bullish or bearish outlook, traders will use this data as part of their overall due diligence process. Identifying possible “big money” bets or large hedges can help add a layer of insight to any trading strategy.
Top Penny Stocks To Watch
Generally speaking, higher Call volume may indicate a more bullish sentiment, and higher Put volume can suggest bearish sentiment. But as anyone with a bit of knowledge about options knows, you can trade them just like stocks and, therefore, “selling to open” a position is a choice when trading options. This will contribute to the volume figure as well. Remember when looking for penny stocks to buy based on unusual options activity.
Now, let’s get into the details and discuss some of the top penny stocks to watch with unusual options activity in the stock market today.
- FuboTV Inc. (NYSE:FUBO)
- Imara Inc. (NASDAQ:IMRA)
- Bird Global Inc. (NYSE:BRDS)
- Party City Holdco (NYSE:PRTY)
- PLBY Group Inc. (NASDAQ:PLBY)
1. FuboTV Inc. (FUBO)
FuboTV is a sports-first entertainment streaming company. It’s also expanding into gaming and this week announced the launch of its New Jersey sportsbook. This news seems to have triggered some action in the options market. In particular, there’s heavy volume in the September 9th $3.50 and $4 Calls.
2. Imara Inc. (IMRA)
Today, the biotech company Imara gained attention in the stock market thanks to news. The company entered into an asset purchase agreement with another pharma company, Cardurion Pharmaceuticals. The agreement is to sell tovinontrine and other assets of its PDE9 program for $34.75 million. While there was already a significant gap-up, the options market seems to continue to surge with unusual options activity. In particular, the September 16th $2.50 Calls saw more than 20x volume compared to Open Interest. The October 21st $2.50 Calls also showed a significantly higher daily volume compared to O/I.[Read More] 4 Hot Penny Stocks To Buy Now According To Top Hedge Funds
3. Bird Global Inc. (BRDS)
eMobility company Bird Global has been expanding its access to new cities in the U.S. Bird specifically focuses on eScooters and eBikes and recently secured permits to extend its programs in San Diego, Memphis, and Newark. It will also enter Louisville, Minneapolis, Knoxville, and Bradenton. The BRDS stock options chain isn’t the most active among names on this list of penny stocks. However, as far as unusual options action goes, April 21, 2023, $2.50 Calls saw an imbalance between today’s volume and current Open Interest. More than 1,100 contracts were traded compared to less than 500 Open Interest. With such a far-out expiration, it will be interesting to see if this latest bet is, in fact, bullish.
4. Party City Holdco (PRTY)
Party supply company Party City has climbed higher in the stock market recently, and options traders could also have started placing bets. With the Halloween season fast approaching, PRTY stock tends to be one that retail traders focus on. Shares have climbed significantly over the last month thanks to strong second-quarter results. Heading into the rest of the month, it looks like most of the action is in the September 16th $2 Calls. More than 1,000 contracts were traded as of this article, and there is also a significant open interest with more than 13,000 contracts.
5. PLBY Group Inc. (PLBY)
The troubling trend in PLBY stock continued in the stock market today. But some traders seem to have turned attention to the options market for solace, hoping for a bullish outlook. The media company, well-known for its mansion parties, magazine, and digital entertainment, hasn’t been as scintillating a story in the market. Will that change?[Read more] Are These Penny Stocks on Your September Buy List?
Looking at the options market, some bets are being placed on PLBY Calls expiring in October. As of this article, more than 2,300 contracts were traded compared to fewer than 1,500 of Open Interest. This imbalance in the $7.50 strike seems to have brought some optimism to some of the members of the Fintwit community. Now the market awaits to find out if this sentiment proves to be true.
Penny Stocks & Options Activity
Penny stocks are already speculative. But when you throw in activity in the options market, this speculation can become even more amplified. It’s important to remember what was discussed above: not all volume is buying volume, and options can be “shorted” by selling to open a position. This process also comes along with certain rewards for traders making that type of trade. If you’re new to trading options, here’s some information from our article: Trading Options 101: A Beginner’s Guide.
“An options contract offers the buyer the opportunity to buy or sell the underlying asset depending on the type of contract they hold. Unlike futures, the holder is not required to purchase or sell the asset if they decide against it. Each contract will have a specific expiration date by which the holder must exercise their option.
The options contract offers buyers two types of options concerning rights that can be acquired with varying options contracts: Call options give buyers options in relation to purchasing stocks at a stipulated time in the future. In contrast, Puts offer them options regarding selling a certain amount of shares they own at a particular time in the future.”
…You Can’t Forget About The Risks. Continue reading Trading Options 101: A Beginner’s Guide, for a complete overview of options trading basics.