June’s job numbers are out. America’s employers created 206,000 jobs last month, demonstrating continued economic strength despite a slight drop from May’s figures. However, with the unemployment rate standing at 4.1%, its highest since October 2021, questions loom about the impact on interest rates.
Coming off the celebrations of Fourth of July, as we return to standard trading hours after the holiday, attention turns to the intriguing world of options trading.
Friday is synonymous with unusual options activity, and this week, we delve into Wednesday’s standout performance. With nine remarkably active options stemming from four companies, a compelling narrative unfolds.
Among the array, three options shine as potential candidates for profitable trades as we advance deeper into July.
Wishing you an excellent weekend ahead!
A Risky Bet That Could Pay Off
First on the list is Unity Software (U), a platform enabling developers to create, run, and monetize games across various devices. Despite a significant 60% decline in stock value year-to-date, signs of promise emerge.
Highlighted by the Motley Fool on July 3, Unity Software may not yield GAAP profits in the near term but shows a promising 172% increase in adjusted EBITDA from Q1 2023.
With Matt Bromberg’s recent appointment as CEO, bringing a wealth of gaming industry experience, including pivotal roles in Zynga’s success, the stock’s potential resurgence is underpinned by strong leadership. An option recommendation includes selling the Sept. 20 $33 strike put at a net price of $16.15, offering a strategic play with substantial upside potential.
Ford Is Back, Baby!
Ford (F) garners attention with two intriguing put options on July 19, poised to bridge the gap with industry rival General Motors (GM) in the stock performance arena.
Analysts, like Barron’s commentator Al Root, foresee Ford’s resurgence, backed by solid operating profit projections and an aggressive foray into electric vehicle sales. The aspect of capital allocation, with special dividends and share repurchases, adds a unique flair to Ford’s investment allure.
A potential move involves selling the $13.82 strike put, amidst Ford’s recent uptrend. With a net price of $12.97 and favorable days for maneuvering, this option play presents an attractive entry point for investors.
The Last of the Single-Letter Bets
Visa (V) and U.S. Steel (X) offer the final three active options, with Visa emerging as the preferred long-term prospect over U.S. Steel by a substantial margin.
Focusing on Visa’s July 19 $285 put, despite modest stock gains in 2024, the risk/reward dynamics warrant exploration. Positioned at a critical juncture, this option play offers a balanced proposition for investors seeking measured returns.