Market Overview

Option Traders Making Aggressive Bullish Plays On Chemours

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Option Traders Making Aggressive Bullish Plays On Chemours

Chemours Co (NYSE: CC) stock traded higher by more than 7 percent on Tuesday after selling off by 8 percent over the previous week.

It’s not just stock buyers that are making big bullish bets on a Chemours bounce. Several unusually large Chemours options trades have been executed this week as well.

The Trades

On Monday and Tuesday, Benzinga Pro subscribers were alerted to a series of six large Chemours call sweeps and one put sweep.

The largest Monday trade was a purchase of 2,500 Chemours call options at a $29 strike price that expire on July 19. The calls were purchased at the ask price of 30 cents and represent a $75,000 bullish bet at a break-even price of $29.30. The price suggests 22.8 percent upside for Chemours within the next two months.

An even larger order for Chemours call options came through in a pair of trades on Tuesday morning. The first trade was the purchase of 532 June 21 $25 Chemours call options at a price of 95 cents. Within an hour, likely the same trader bought an additional 500-contract batch of the same June $25 calls. This time, the buyer paid a higher price of $1.101, bringing the total bullish bet on Chemours up to $105,590.

Even traders that focus exclusively on the stock market watch the options market closely to gain insight into what option traders may be thinking. Due to the relative complexity of the options market, options traders are generally seen as more sophisticated than the typical stock trader. Large options traders are often institutions or wealthy individuals that may have a unique perspective and/or advanced information on a given stock.

Under-The-Radar 5G Play?

The only major piece of news out this week that could potentially be inspiring the heavy Chemours buying is news from the company on Tuesday that its fluoropolymer technologies will be essential for the 5G services at the CHINAPLAS plastics and rubber trade fair.

Traders may be speculating Chemours will play a big part in the global 5G network rollout, or they may simply be betting that Chemours will be a beneficiary of a ramp in infrastructure spending in the coming months.

Unfortunately, there’s no way to be 100 percent certain whether the buys are a standalone position or a hedge against a larger stock holding. Given that none of the six individual Chemours options trades exceeded $75,000, this week’s Chemours trades are unlikely to be hedges.

The stock traded around $24.11 per share at time of publication.

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