Marathon Digital Sees Heavy Selling of $16 Call Options Ahead of Notes Offering
$MARA Holdings (MARA.US)$ is seeing heavy selling of call options that give the holders the right to buy the bitcoin miner's shares at $16 each as the stock price tumbled below that strike price.
The sell-off seen in the call options market and the stock's 6.5% slump to $15.93 came after Marathon Digital on Monday announced plans to offer $250 million of convertible senior notes, and said it expects to grant the initial buyers the option to purchase an additional $37.5 million of notes.
About 7,840 of those call options expiring on Friday changed hands less than two hours into the trading day. That's more than eight times the 970 outstanding contracts, also known as open interest. The sell-off sent the price of the contract slumping 55% to 65 cents as of 11:22 a.m. New York time.
The volume on those calls expiring in four days is more than half of the total for all $16 call options tied to the stock that are spread across the 14 expiration dates stretching through Jan. 16, 2026, data tracked by moomoo show.
According to the company's press release, the notes, which will mature on Sept. 1, 2031, will be convertible into cash, shares or a combination of cash and shares. That may dilute the stake of existing holders.
After the share slump seen Monday morning, technical indicators tracked by moomoo are now flashing positive signals, with nine of the 15 gauges showing that Marathon Digital could be oversold, and the trend may turn bullish. So far, fund inflows into the stock outpaced outflows by $8.2 million. That trimmed this month's net outflows to $53.15 million.
Can Marathon Digital recover the losses Monday? Share your thoughts below and please cast your vote if you have a price forecast.
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Options trading entails significant risk and is not appropriate for all customers. It is important that investors read Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount. Supporting documentation for any claims, if applicable, will be furnished upon request. Moomoo does not guarantee favorable investment outcomes. The past performance of a security or financial product does not guarantee future results or returns. Customers should consider their investment objectives and risks carefully before investing in options. Because of the importance of tax considerations to all options transactions, the customer considering options should consult their tax advisor as to how taxes affect the outcome of each options strategy. All company analysis information is provided by third parties and not by Moomoo Financial Inc. Any illustrations, scenarios, or specific securities referenced herein are strictly for informational purposes and is not a recommendation. Past investment performance does not guarantee future results. Investing involves risk and the potential to lose principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct.
Options trading entails significant risk and is not appropriate for all customers. It is important that investors read Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount. Supporting documentation for any claims, if applicable, will be furnished upon request. Moomoo does not guarantee favorable investment outcomes. The past performance of a security or financial product does not guarantee future results or returns. Customers should consider their investment objectives and risks carefully before investing in options. Because of the importance of tax considerations to all options transactions, the customer considering options should consult their tax advisor as to how taxes affect the outcome of each options strategy. All company analysis information is provided by third parties and not by Moomoo Financial Inc. Any illustrations, scenarios, or specific securities referenced herein are strictly for informational purposes and is not a recommendation. Past investment performance does not guarantee future results. Investing involves risk and the potential to lose principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct.
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