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According to Options and Volatility, shares of King Digital Entertainment PLC (NASDAQ: KING) saw unusually high options activity on Friday. Notably, the August 15.06 calls traded 3,079 contracts versus only 1,017 open interest.
The August 16.06 traded 6,529 contracts as well.
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In addition to the increased volume, the implied volatility on the August 15.06 rose dramatically, moving from 49.86 on Thursday's to 56.11 on the close Friday, an increase of nearly 16.54 percent.
While shares of King rose 0.13 on the day, the price of the August 15.06 calls rose 2.5 times that amount, or 0.33. This set up a covered call opportunity, buying shares of King and selling a August 15.06 call for each 100 shares purchased.
Options and Volatility noted this captures a 2.08 percent edge and positions bullishly along with the large call buyer, while capturing the spike in implied volatility.
The August 15.06 calls have a delta of 43, while the covered call position has a slightly more bullish delta of 57.
Disclosure: The author had a long position in KING at the time of publishing.
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.