Jul 14, 2022 (Penny Stocks via COMTEX) -- These penny stocks have seen unusually bullish options activity while the stock market is down today. Thanks to bearish CPI data and concerns over hawkish Fed interest rate hikes, it's interesting to see that there is some optimism left. Ironically, it has to do with several stocks under $5:
Vroom Inc. /zigman2/quotes/218801255/lastsale VRM +1.61% | January 20, 2023 $2 Calls
ironSource Ltd. | September 16, 2022 $2.50 Calls
UP Fintech Holding Limited /zigman2/quotes/207683784/composite TIGR +3.79% | October 21, 2022, $5 Calls
Those are the penny stocks with unusually bullish options volume today. In this article, we'll take a closer look at what's gone on with the companies and what might be some potential catalysts to keep in mind.
Penny Stocks To Buy Now [or avoid]
In the stock market today, there's no shortage of volatility. The latest round of economic data and comments from several Federal Reserve presidents have put pressure on stocks. Kansas City Fed President Esther George made remarks earlier this week and gave her outlook on a fragile rate & inflationary environment.
She explained that "the case for continuing to remove policy accommodation is clear-cut" in light of some of the highest inflation in decades. "The pace at which this path unfolds will need to be carefully balanced against the state of the economy and financial markets…This is already a historically swift pace of rate increases for households and businesses to adapt to, and more abrupt changes in interest rates could create strains, either in the economy or financial markets," George said.
Meanwhile, other Federal Reserve Presidents, including Raphael Bostic, echoed a more direct and grim response to the latest round of inflation data. "Everything is in play…today's numbers suggest the trajectory is not moving in a positive way ... How much I need to adapt is really the next question," Bostic explained.
While sentiment like this added to the pessimistic view in the stock market this week, it hasn't caused fear for those looking to buy penny stocks . The critical thing to remember is that volatility is a big proponent. Considering the higher levels of market shifts, day trading has become a favored method of making money trading. Let's see if any of these bullish options bets mean longer-term potential.
January 20, 2023 $2 Calls
Vroom Inc is no stranger to retail-trader-fueled breakouts. We have discussed the company plenty in the last few months as sentiment shifts for the auto industry continue driving volatility. Vroom has even been in the discussion for unusual options activity, which ultimately came to fruition this week. Our article " 4 Penny Stocks Traders Are Betting Big On But Are They A Buy Now? " highlighted unusual activity in the July 15th $1.50 and $2 Calls. As of this week, VRM stock is trading within this range.
The company provides an eCommerce platform for buying and selling used vehicles and recently posted stronger than expected earnings for the first quarter. Sales came in at just over $930 million and beat estimates by a wider margin. "As we look forward, we intend to prioritize unit economics over growth, reduce operating expenses, and focus on four key initiatives to build a profitable business," explained CEO Thomas Shortt in his Q1 update.
Now, options traders are betting on VRM stock based on recent unusual activity. As of this article, over 700 contracts have traded at the January 20, 2023, $2 strike Calls. There is also plenty of open interest throughout the Call options chain, as high as $15. It will be interesting to see if these long bullish bets pay off for VRM stock traders.
September 16, 2022 $2.50 Calls
Shares of IronSource exploded this week on the back of a significant update. Unity (NYSE: U ) announced that it entered into a definitive agreement for ironSource to merge with the tech company. One of the attractive aspects of IS to Unity is its business platform targeting mobile content creators looking to turn apps into scalable businesses.
According to the July 14the update, "The companies' complementary offerings create a unique end-to-end platform that allows creators to create, publish, run, monetize, and grow live games and RT3D content seamlessly."