Shares of Carvana Co. CVNA have gained a whopping 208% year to date. On CNBC's "Options Action," Michael Khouw of Optimize Advisors said the stock traded three times its average daily volume on Thursday.
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There were buyers of 4,257 of the February 25 calls, at an average price of $1.95 per contract, Khouw mentioned. Traders expect Carvana’s shares to rise by at least 89% by February expiration, he added. “People buy options when they are betting on a short squeeze,” he said, adding the traders are betting on the potential of the short squeeze to continue.
CVNA Price Action: Shares of Carvana rose by 5.09% to close at $14.25 on Thursday.
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