Coinbase Bulls Pour Millions of Dollars Into Call Options Amid Stock Rally
$Coinbase (COIN.US)$ bulls are pouring millions of dollars in call options Thursday after shares climb 31% a day earlier as former President Donald Trump beat Vice President Kamala Harris in the presidential race.
"Trump's election likely brings a more crypto-friendly SEC that could narrow or even drop its case against Coinbase," Elliott Stein, a senior ligitation analyst at Bloomberg Intelligence said in a note. "Donald Trump's win boosts the chance that Coinbase will beat the SEC's 2023 lawsuit against the crypto platform for allegedly selling unregistered securities."
Source: moomoo desktop app
The crypto industry supported Trump's candidacy, hopeful that a turnover of power in the White House could lead to changes in the Securities and Exchange Commission. The regulator has sued crypto firms after the blowup of FTX in 2022, according to a Bloomberg report. Just last year, 46 lawsuits were filed, the highest of such action brought by the regulator in a single year, a Cornerstone Research report showed.
Coinbase shares rose 0.3% to $254.87 after posting their biggest advance since April 2021 on Wednesday. The rally took gains this week to more than 39%. That positive sentiment has spilled over to the options market, with unusual activities showing millions of dollars in bullish positions in the options market.
Source: moomoo mobile app
The biggest of such bullish trades was a $21.3 million premium paid by an active buyer for call options that give the holder the right to buy 1.117 million Coinbase shares at $245 each by the end of next week. Seven other bullish option trades worth between $3 million and $17.1 million were posted as of 11:02 a.m. in New York.
Fund inflows into the stock outpaced outflows by $129.8 million so far, adding to a second net monthly inflow into Coinbase, capital trend data tracked by moomoo showed. The uptrend could be facing technical headwinds though.
After yesterday's climb, 10 of the 15 technical indicators tracked by moomoo are showing the stock could be overbought and the trend may turn bearish.
Is Coinbase nearing its peak or can it sustain the rally through the rest of the year? Share your thoughts in the comments section and if you have a price forecast, vote below.
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Moomoo Senior News and Community Manager
Former editor at Bloomberg, ex-commentary editor at Lazard. Posts aren’t investment advice. Views are just mine.
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