Shares of Uber Technologies Inc (NYSE: NYSE:UBER) fell close to 5% on Wednesday after the company reported its first-quarter print.
On CNBC's "Options Action," Michael Khouw of Optimize Advisors said that Uber traded well over four times its average daily call volume.
There was a buyer of 2,500 of the June 40/50 call spreads at an average price of $1.23 per contract, Khouw mentioned. “Ultimately, 10,000 of those traded by the end of the day. That is well out of the money,” he stated.
Check out other stocks moving on earnings in the premarket.
Shares of Uber Technologies would need to rise by at least 50% for that trader just to break even, and the higher strike call that they sold is 80% out of the money, Khouw said.
“It is possible that a trade like that could be used as a partial hedge against a short position but either way it indicates some assessment that there’s a possibility of the stock somehow rebounds. That’s quite a move,” he added.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Read at Benzinga