A Review of Noteworthy Options Activity in Lucid Group, Inc. (LCID)

On October 19, 2021, in the market capitalization-weighted index NASDAQ Global Select Market Composite (NasdaqGS), we reported on significantly sized options trading volume and activity in Lucid Group, Inc., which opened that day at $25.41.

• There were 7,085 contracts traded on the $28 strike call option, at the bid, dated for October 29th, 2021.
• Additionally, there were another 7,085 contracts traded on the $23 strike put option, at the ask, for the same date.
• Altogether, these orders represent approximately 1,417,000 shares and $539,000 premium traded, and might be described as significantly bearish bets.

On September 29th, 2021, Lucid Group, Inc.’s CEO stated that production had begun and that they were on track for 2022 and 2023.  However, Alex Sirois of InvestorPlace has opined:

“LCID stock did not get a boost on news that production had started. In fact, shares sit about 13% lower since the announcement. This leads me to believe any enthusiasm for the start of production was already baked into the price.”

91.7% of premiums traded at these levels are bearish, with 65% on bid-side orders, with 63% in calls, representing a bearish expectation by the largest whales.

The most popular strike being bet upon at these levels is the $28 strike with 1,920% more premium traded than its bullish counterparts.  The most popular expirations are the January 2022 and the January 2024, both with approximately 1.2M in bearish premium traded.

A Continuation of the Trend in by Floor Traders and Whales

Of note, there were no relevant orders from October 22nd until October 25th, 2021; then, the $19 strike put option contract was purchased on the 25th, but only amounting to $17,000 in premium traded.

Expounding from the 22nd to 27th orders above, these three orders came in together, all floor trades, and all representing what might be considered a bearish sentiment; however, of note, the open interest on all of these contracts was greater than the sizes of these trades, so these are not particularly noteworthy, unusual, or useful in determining whether or not these floor traders were preparing for any inclement price action.

Finally, and perhaps most significantly, there was the above trade, the 140 contracts traded on the $25 strike call option, sold below the bid, on October 27th.

To reiterate just as the previously aforementioned trades conducted in tandem, this single order’s size was less than its open interest at the time, which was approximately 8,000 contracts in circulation; therefore, as they were traded below the bid, it is not clear whether they were sold to open or to close at the time.

Contrarian Unusual Options Activity & Whale-Sized Gains

On October 25th, 2021, Lucid Group, Inc. opened at $24.88; indeed, there had been a minor decrease in Lucid Group, Inc’s price.  However, in spite of the aforementioned bearish betting by whales at the largest premium sizes, there was an unusual option bet that came through the Unusual Whales Alert tool, viewable here.

The alert triggered at 12:22PM on October 25th, 2021.  The ask of the contracts at the time was $0.35; their maximum cost thus far at the time of this writing has been $10.45, or a 2,885.71% gain.

Retail Traders Go Whale Hunting

On October 27th, 2021, Lucid Group, Inc. opened at $27.69.

That day, one Twitter user reported on the unusual options activity, stating that:

“Yesterday I saw $LCID 10/29 $30 C on @unusual_whales Hot Chains and Tickers. I then noticed that volume was crazy relative to OI..something like 80k vs around 10k or so. Then, some quick TA to see if I liked the idea. I then bought 10/29 $30 / $31 Call Spreads. Up > 1,000% today”

This user had witnessed the unusual activity first by viewing the Unusual Whales Hottest Chains & Tickers list which can be viewed by clicking here.

Somebody Always Knows--But It’s Not Always Floor Traders

Following the Unusual Whales Flow is powerful because it allows retail traders to investigate the options activity during the day, in real time, to gain insight on how other traders are using options contracts to position themselves.

Sometimes, however, we follow blindly; rather, we corner ourselves into a singular strategy and do not investigate other potential opportunities.

This is what makes the Flow tool--and all of the other Unusual Whales tools--so extraordinarily useful.  Filters can be changed and other perspectives might be investigated.

If you are interested in trying out the Unusual Whales platform, now could not be a better time, as Unusual Whales is hosting a scary-good sale!  We're offering:

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