As I write this on Thursday morning, 1.6 million options contracts have traded with a put/call ratio of 0.84, a sign that investors are in a bullish mood early in the day. Of course, we know that can always change.
A big reason for the enthusiastic start is the benign U.S. CPI report. The July U.S. CPI rose 3.2% year-over-year, below the expected 3.3% increase. The July U.S. CPI, excluding food and energy, rose 4.7% YOY, down from 4.8% in June and right on the consensus estimate for July.
The big news on the M&A front: Tapestry (TPR), the parent of Coach and Kate Spade, is buying Capri Holdings (CPRI) for $8.5 billion. Capri owns Michael Kors, Versace, and Jimmy Choo. CPRI is up 56% on the news.
But I digress.
I’m here to talk about unusual options activity. Looking at Wednesday’s trading, there were 17 options with more than 365 days to expiration. Three of them don’t expire for more than two years.
Although each of them is troubled, their options make interesting long-term plays.
Coinbase
I must admit that I haven't paid much attention to cryptocurrencies over the past 18 months. After the Sam Bankman-Fried fiasco, I gave hope for the entire crypto space. Not surprisingly, it seems to be back.
So, my first possibility is Coinbase (COIN), the world’s largest cryptocurrency exchange. Its shares are up 154% YTD but down 75% over the past five years. COIN is the ARK Innovation ETF’s (ARKK) third-largest holding. Portfolio manager Cathie Wood is convinced that Coinbase will continue to be a player in the crypto world, although she did sell off some of Ark Investment’s holdings in July.
The Dec. 19/2025 $200 call option had 700 contracts traded on Wednesday, 4.93x its open interest. The ask price of $19.00 means you’ll need the shares to increase to $219 in the next 863 days to exercise your right to buy 100 COIN shares. The last time the shares traded at that level was January 2022, 20 months ago.
With 31 months until expiry, it’s got a real shot.
However, what attracts me to this call, is the delta of 0.44760. This means that Coinbase stock has to rise by $42.45 for you to double your money on the call. That’s well short of the $219 you’d pay to buy the shares.
So, for a 10% down payment of sorts on the strike, you’re giving yourself an excellent chance to make money on the play.
Intel
I'm amazed that Intel (INTC) gets any attention from investors, given the amount of media devoted to Nvidia (NVDA) and Advanced Micro Devices (AMD). You’d think it was a floundering business, not a $144 billion market cap.
There’s no question analysts have their doubts. According to Barchart.com data, the 32 analysts that cover INTC give it an average rating of Hold (3.00 out of 5) with a $35.03 mean price target about where it’s currently trading.
However, the company is undertaking a massive expansion of its capacity to deliver for its customers and third-party foundries. While the proof will be in the pudding, success would do wonders for the long-term success of its share price.
The Dec. 19/2025 $35 put had a volume of 3,111 on Wednesday, 1.65x the open interest. With a bid price of $5.60, we’re talking about an annualized yield of 6.8%. That might not seem like a good return on the premium income should you sell these puts. However, its current dividend yield is only 1.4%.
So, you can buy shares at current prices of around $34.80 and get paid 1.4% while you wait for its shares to move higher, or you sell some puts and receive 6.8% to accomplish the same.
Yes, 863 days is a long time, and almost anything could happen between now and then. Maybe you also consider buying Dec. 19/2025 $35 calls for $8.60 a contract, so you’ve got the right to purchase shares at $43.60 at expiry, less the $5.60 in put premium, for a net price of $38.
Beyond Meat
I’m a pescetarian. I have been for nearly a decade. As a result, I do eat a fair bit of Beyond Meat’s (BYND) products. I’d be lying, however, if I didn’t admit that Beyond Meat’s four-plus years as a public company have been less than stellar.
It’s been a downright disaster. In July 2019, BYND shares hit $235. They’re down 94% since. I’d say that’s a disaster if you’re still holding. I doubt many are.
Call this third option a possible Hail Mary.
The BYND Dec. 19/2025 $8 put also expires in 863 days. It has a bid price of $4.10. That’s an annualized yield of 13.2%. That’s pretty good.
The downside is that to have the shares put to you at expiration, BYND will have to fall another 39%. I’m not sure anyone can endure this pain for a lower share price.
But as I said about Intel, consider an $8 call with the same expiration. The ask is $6.30 for a net price of $14.30, $1.09 higher than its current share price.
So, let’s assume that Beyond Meat’s share price is $9 at expiration. So, you keep the $4.10 in premium income but lose $6.30 from the premium paid for the call, ultimately costing you $2.20 a share for your trouble.
If you’re a risk-taker, that’s not the worst thing in the world.
On the date of publication, Will Ashworth did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
